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Feb 26, 2013 4:20 PM

Kinder Morgan Energy Partners LP announced KW Express LLC, a partnership between KMP and Watco Companies LLC, has entered into a long-term agreement with Mercuria Energy Trading Company Inc, to construct a 210,000 barrel per day (bpd) crude-by-rail project at the Greens Port Industrial Park on the Houston (TX) Ship Channel.

The project will allow Mercuria Energy Trading Inc to source crude from various origination locations including Cushing OK, West Texas, the Bakken shale area, and western Canada for delivery by rail into the Houston Ship Channel for distribution to various refiners via pipeline and barges. The facility will have the capability to unload and load up to three unit trains per day of crude oil and condensate as well as provide for up to 100,000 bpd of barge loading capacity. KW Express will own 85% of the project and, together with Watco, construct and operate the project once completed. Mercuria will own the remaining 15% interest of the project.

“This will be the first major crude by rail destination facility in the Houston area with the ability to deliver into the largest refining complex in the world,” says John Schlosser, Kinder Morgan Terminals president. “It will provide US and Canadian producers much needed market access and optionality to deliver their crude oil production.”