KINDER Morgan Energy Partners LP, Houston, Texas, has announced three initiatives that will further expand the company's growing terminals business. The $36-million investment includes the purchase of two terminal facilities located along the Mississippi and Ohio Rivers, as well as a long-term contract to build additional storage capacity at KMP's liquids terminal in New York Harbor.
“These initiatives demonstrate our ongoing strategy of targeting stable, fee-based assets that offer attractive growth potential and add value for our investors,” says Richard D Kinder, chairman and chief executive officer. “The two acquisitions are expected to be accretive to cash available for distribution to KMP unit holders, as is the expansion project upon completion.”
One of the recently completed acquisitions involved the purchase of the former ICOM marine terminal in St Gabriel, Louisiana, from the Canadian National Railroad. The facility features 400,000 barrels of storage capacity and a related pipeline network that serves one of the fastest growing petrochemical production areas in the country. A significant amount of the property remains undeveloped and is available for future expansion.
In a separate transaction, KMP recently acquired the Lanham River Terminal near Owensboro, Kentucky. The 92-acre site, which Kinder Morgan has renamed the Owensboro Gateway Terminal (OGT), occupies more than a mile of waterfront along the Ohio River and is one of the nation's largest storage and handling points for bulk aluminum.
In 2001, the facility became one of four locations used by the New York Mercantile Exchange (NYMEX) to establish aluminum prices. The terminal also handles other bulk materials including lime, petroleum coke, coal, grain, and woodchips. OGT moves an average of 440,000 tons of product annually via barge, rail, and truck transportation.
KMP has also entered into a long-term storage agreement with a petroleum customer that will require construction of an additional 300,000 barrels of storage at its Perth Amboy, New Jersey terminal. As part of the project, KMP will build three 100,000-barrel tanks, increasing petroleum capacity at the facility by more than 20 percent. The need for additional storage is being driven by increased demand for clean-fuel storage capacity in New York Harbor.
Kinder Morgan Energy Partners LP is a publicly traded pipeline limited partnership and an independent refined petroleum products pipeline system in the United States.
KMP owns or operates more than 25,000 miles of pipelines and over 70 terminals. The company's pipelines transport more than two million barrels per day of gasoline and other petroleum products and up to 7.8 billion cubic feet per day of natural gas. Terminals handle over 55 million tons of coal and other dry-bulk materials annually and have a liquids storage capacity of approximately 55 million barrels for petroleum products and chemicals, according to company information.
The general partner of KMP is owned by Kinder Morgan, Inc. Combined, the two companies have an enterprise value of approximately $17 billion.