Kinder Morgan Energy Partners, L.P. (NYSE: KMP) and BP North America (NYSE: BP) on Thursday announced the execution of long-term commercial agreements to provide BP condensate processing services and storage at Kinder Morgan's terminals located on the Houston Ship Channel.
BP has committed over 40,000 barrels per day (bpd) of throughput at Kinder Morgan's petroleum condensate facility which will split condensate into various components such as light and heavy naphthas, kerosene and gas oil. The approximately $200 million facility has been designed to provide future processing expansions up to 100,000 bpd throughput.
BP also will lease an additional 750,000 barrels of storage that Kinder Morgan will add at its Galena Park terminal. The expansion is part of Kinder Morgan's approximately $75 million investment to construct five tanks that will connect to its condensate facility with new piping, manifolds and pumps. The company expects the new storage tanks and condensate facility to be in service in the first quarter of 2014.
"BP is proud to participate in a project that helps unlock additional domestic energy production and offers US Producers an alternative home for their condensate barrels," said Paul Reed, Chief Executive of BP's integrated supply and trading business. "This long-term commitment demonstrates BP's desire to provide its customers with flexibility in managing their feedstock and product needs and enhances our strategic relationship with Kinder Morgan."
"We are pleased to enter into these contracts with BP, which reflect continued strong demand to bring Eagle Ford Shale production to the Gulf Coast," said Tom Bannigan, president of Kinder Morgan's Products Pipelines. "Our splitter facility combined with our Eagle Ford to Houston crude/condensate pipeline and associated Houston Ship Channel storage facilities offer customers like BP unparalleled connectivity to the full range of Gulf Coast markets including refineries, chemical companies, gasoline blenders, outbound pipelines and marine facilities."