Kinder Morgan Energy Partners, L.P. (NYSE:KMP) today announced the completion of several expansion projects representing a total investment of more than $500 million in terminal facilities at the Houston Ship Channel, New York Harbor, Argo, Ill., Newport News, Va., Columbus, Miss., and Edmonton, Alberta.
The expansions will increase the company’s total liquids storage capacity in its terminals business segment from 47.5 million to approximately 51.5 million barrels and will also boost bulk throughput.
“During the last two years, we have focused our efforts on larger capital expansion projects to provide our customers with additional infrastructure that will support their business needs over the long-term,” said Jeff Armstrong, president of KMP’s terminals group.
“It’s exciting to see these projects coming to fruition, which will strengthen our vast terminal network and generate additional cash flow for our unitholders. These projects are expected to generate aggregate first full year EBITDA of approximately $68 million.”
Liquids Terminals Expansion Overview
The Galena Park Terminal added approximately 650,000 barrels of storage capacity, as five new tanks came on line in the past two months. These tanks are part of a $195 million expansion in the company’s Galena Park/Pasadena facilities on the Houston Ship Channel. Three more tanks are expected to go into service this year, which will bring total capacity of the combined complex to approximately 25 million barrels.
Construction is complete on nine new liquid storage tanks at the Perth Amboy Terminal in New York Harbor, which increased capacity for refined petroleum products and chemicals by 1.4 million barrels to approximately 3.7 million barrels. Continued strong demand for refined products in the Northeast, much of which is being met by imported fuel arriving via New York Harbor, was the catalyst for this $68 million expansion.
The North 40 Terminal project in Edmonton, expected to be completed by the end of the first quarter, will add 2.15 million barrels of crude oil and refined petroleum product capacity to the KMP terminal network. The approximately $152 million project includes building a total of nine tanks. The facility will provide needed storage capacity and services to support oil sands shipments, local refinery feed stocks, blending and crude pipeline shipments.
The Staten Island Terminal can now accommodate larger tanker vessels with the completion of approximately $27 million in projects that included refurbishing the facility’s ship dock and adding tank upgrades. The terminal has a storage capacity of approximately 3 million barrels for gasoline, diesel and fuel oil.
The first phase of an approximately $4 million ethanol expansion project is complete at the Argo, Ill., facility. A 95,000 barrel ethanol storage tank is in service and another tank is scheduled to commence operation in April.
Bulk Terminals Expansion Overview
An almost $70 million expansion of the Pier IX bulk terminal in Newport News, Va., is nearing completion. The project involved the construction of a new dock and installation of additional equipment that is expected to increase throughput by 30 percent to about 9 million tons a year. The expansion will also allow the facility – which primarily handles coal – to receive product via vessel in addition to rail, which has been the primary mode of inbound transportation for the past 26 years.
A new terminal on the Tennessee-Tombigbee Waterway in Columbus, Miss., has begun service. The $8.5 million facility will handle scrap iron and other raw materials for steel making to support the SeverCorr steel plant. The marine facility will have an inbound capacity of about 900,000 tons per year.
Kinder Morgan Energy Partners, L.P. (NYSE:KMP) is a leading pipeline transportation and energy storage company in North America. KMP owns an interest in or operates more than 25,000 miles of pipelines and 165 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle bulk materials like coal and petroleum coke. KMP is also the leading provider of CO2 for enhanced oil recovery projects in North America. One of the largest publicly traded pipeline limited partnerships in America, KMP has an enterprise value of approximately $20 billion. The general partner of KMP is owned by Knight Inc. (formerly Kinder Morgan, Inc.), a private company.
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Kinder Morgan believes that its expectations are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein are enumerated in Kinder Morgan’s Forms 10-K and 10-Q as filed with the Securities and Exchange Commission.
