Kinder Morgan will complete by end-2011 another two 80,000-bbl capacity clean product storage tanks at its Carson, Calif., terminal after commissioning 480,000 bbl storage capacity in August-September, Joe Hollier, a company spokesman, told OPIS on Friday.
“Yes, even in a very weak economy and refining margins, there’s still a shortage of ‘transportation assets’ in the petroleum industry in Southern California,” he said when asked by OPIS about storage demand in California.
OPIS notes that storage tanks in California and the U.S. Northeast markets typically command a premium to those in the Midwest or on the Gulf Coast. This is because of long lead times for permits and high construction costs.
Kinder Morgan has also built a system that enables refiners, traders, marketers to have a very “liquid” environment to take advantage of sudden market changes, he added.
The terminal and logistics network allows access to Kinder Morgan SFPP Watson Station for barrels to move to Southern California, Arizona and Nevada.
The Carson terminal features a 10-lane truck rack, and a dock that can offload and load cargoes from/to any international destination.
New tanks are also multi-product, drain dry type that enables customers to store and carry all different types of distillates, gasoline, and gasoline blending components.
The new tanks are part of an ongoing expansion project at the largest Kinder Morgan terminal on the West Coast.
Upon completion in 2013, the terminal’s storage capacity will increase by about 23% from the total capacity of 4.42 million bbl prior to expansion to the new expanded capacity of 5.442 million bbl.
Kinder Morgan is not only adding new storage tanks, but replacing some of the oldest and least functional storage at that terminal.
“During the build out of 18 new 80,000-bbl tanks, which added 1.44 million bbl of storage, we knocked down 418,000 bbl of old storage,” Hollier said.
The project is to add a total of 1.44 million bbl of clean product storage space at Carson by 2013, but Kinder Morgan will also knock down three 80,000-bbl each old tanks and one 178,000-bbl tank to make room for the new tanks.
Besides finished petroleum products, the terminal also stores crude oil, refinery feedstocks and gasoline blend stocks.
In the current final phase, Kinder Morgan will build seven 80,000-bbl tanks or a total of 560,000 bbl. The first two will be completed by the end of 2011, and the remaining five will be completed in 2013.
Six of the new tanks will be leased by Chevron, and the last tank remains open for lease.
In August-September, the phase 2 expansion was completed, bringing onstream six 80,000-bbl capacity tanks or a total of 480,000 bbl.
These tanks are being leased by Neste Oy and Glencore.
In the first phase, which added five 80,000-bbl tanks or 400,000 bbl, was completed in December 2005-January 2006.
These tanks are being leased by ConocoPhillips, Vitol and Glencore.