Kinder Morgan to Spend $170MM-plus Near Houston

Kinder Morgan to Spend $170MM-plus Near Houston
Kinder Morgan plans to spend more than $170 million on capital projects along the Houston Ship Channel.

Kinder Morgan, Inc. (KMI) on Wednesday unveiled plans to spend more than $170 million on capital projects at its Pasadena and Galena Park terminals in Texas along the Houston Ship Channel.

“The announced improvements only serve to enhance our position as the market-leading refined petroleum products storage hub on the U.S. Gulf Coast,” John Schlosser, president of KMI’s Terminals unit, said in a written statement. “This offers our customers unmatched supply optionality and liquidity and modal efficiencies as they aim to maximize storage and blending economics and access domestic and global energy supply markets in the most cost-effective manner possible.”

According to a KMI, the company’s Houston Ship Channel storage hub currently features:

  • 10 ship docks
  • 38 barge spots
  • 20 inbound pipelines linked to 10 regional refineries and chemical plants
  • 15 outbound pipelines
  • 14 cross-channel lines
  • Approximately 43 million barrels of storage

KMI stated that it plans to invest approximately $125 million on the following enhancements to its Pasadena Terminal and Jefferson Street Truck Rack:

  • Increase flow rates on inbound pipeline connections and outbound dock lines to cut vessel load times and expand effective dock capacity
  • Modify tanks to facilitate butane blending and vapor combustion capabilities on 10 storage tanks, with the option to expand capabilities to 25 or more additional tanks
  • Expand the methyl-tert-butyl ether (MTBE) storage and blending platform, including a cross-channel MTBE line for vessels loading at Pasadena’s North Docks
  • Add a dedicated natural gasoline (C5) inbound connection to enhance blendstock supply optionality and liquidity

KMI anticipates the above improvements should conclude by the end of the second quarter of 2020. The firm also noted that a long-term agreement with a major refiner for approximately 2 million barrels of refined products storage capacity at Pasadena supports the investments.

In Wednesday’s announcement, KMI also stated that it will develop and construct a butane-on-demand blending system for 25 tanks at the Galena Park Terminal. The company reported the project, expected to cost more than $45 million, encompasses:

  • Constructing a 30,000-barrel butane sphere and new inbound C4 pipeline connection
  • Making tank and pipe modifications to extend butane blending capabilities to 25 tanks, two ship docks and six cross-channel pipelines.

KMI noted that a long-term deal with an investment-grade midstream company justifies the Galena Park project, which it expects to conclude in the fourth quarter of 2020.


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