Kinder Morgan to invest in $400mn oil terminal at Houston Ship Channel
Kinder Morgan Energy Partners said on Tuesday that it will join with Battleground Oil Specialty Terminal Co. (BOSTCO) - a venture with TransMontaigne Partners - in building, owning and operating a new $400 million oil terminal on the Houston Ship Channel.
The initial phase of the project currently includes construction of 52 storage tanks that will have a capacity of 6.6 million bbl for handling residual fuel and other black oils.
Terminal service agreements and/or letters of intent have been executed with customers for almost all of the capacity, according to the company.
“There is increasing demand for an efficient and high performing terminal on the Texas Gulf Coast that can export fuel oil, which is used primarily in ship engines, power plants and industrial plants,” said Jeff Armstrong, president of Kinder Morgan Terminals.
“This facility will enable us to provide new services to our customers and future phases will tie this deepwater terminal to other Kinder Morgan assets in the Houston market. Our investment in BOSTCO is expected to be accretive to cash distributable to KMP unitholders when the first phase of the project comes online by the third quarter of 2013.”
BOSTCO has received a required Texas Commission on Environmental Quality (TCEQ) air permit and necessary Port of Houston permits, and anticipates receiving the remaining permit by the end of November.
Construction of the tanks is expected to begin this year upon completion of binding definitive customer agreements.
The project will employ approximately 450 local contractors during construction and about 75 full-time employees will be needed to operate the facility once it is completed.
The terminal will be located at mile marker 43 on the Houston Ship Channel and will initially be a water-in and water-out facility with the capability of handling ships with large drafts up to 45 feet.
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