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Kinder Morgan to Invest Up to $100 Million in Biodiesel Infrastructure

Kinder Morgan Energy Partners plans to invest up to $100 million to expand its terminal facilities to help serve the growing biodiesel market.

KMP has entered into long-term agreements with Green Earth Fuels, LLC to build up to 1.3 million barrels of tankage that will handle approximately 8 million barrels of biodiesel production at KMP’s terminals on the Houston Ship Channel, the Port of New Orleans and in New York Harbor.

Green Earth Fuels has agreed to build biodiesel production facilities at various KMP terminal sites in these regions and has already begun construction on an 86 million gallon facility at KMP’s Galena Park Terminal on the Houston Ship Channel that is expected to commence operations in July 2007.

Upon completion, these expansions are expected to be immediately accretive to distribution available to KMP unitholders.

In addition to biodiesel, KMP has significantly increased its handling of ethanol and continues to pursue additional ethanol opportunities in both its terminals and products pipelines business units. In 2006, KMP handled approximately 1.5 billion gallons of ethanol, almost 30% of the domestic ethanol market.

The terminals group currently provides ethanol services at its facilities in Chicago, New York Harbor, Philadelphia, New Orleans, Los Angeles and Houston, while the products pipelines group provides storage and blending of ethanol at its terminals in California, Nevada, Arizona, Virginia and Florida.

Kinder Morgan Energy Partners is one of the largest publicly traded pipeline limited partnerships in America and owns or operates more than 27,000 miles of pipelines and approximately 145 terminals.

Its pipelines transport more than 2 million barrels/day of gasoline and other petroleum products and up to 9 billion cubic feet/day of natural gas; and, its terminals handle more than 80 million tons of coal and other bulk materials annually and have a liquids storage capacity of about 70 million barrels for petroleum products and chemicals. KMP is also the leading provider of CO2 for enhanced oil recovery projects in the United States.

Comments

Neil

KMP has a couple of billion to play with after the sale of Terasen Gas.

Cervus

This sounds pretty major to me. This is the first storage facility of this size for biodiesel that I've read about. Sounds like it's about to become more immediately available in the Houston area.

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