Kinder Morgan Energy Partners (KMP) has entered into an agreement with Phillips 66 to extend KMP’s Kinder Morgan Crude Condensate (KMCC) pipeline and transport Eagle Ford crude and condensate to Phillips 66’s Sweeny Refinery located in Texas,US.
KMP, under the agreement, will invest $90m and construct a 27-mile, 12-inch diameter lateral pipeline, which will serve Phillips 66 with a significant portion of the lateral pipeline’s initial 30,000 barrels per day (bpd) of capacity, which is expandable to 100,000 bpd.
The KMCC pipeline is used to deliver crude/condensate from the Eagle Ford shale to the Houston Ship Channel through 65 miles of new-build construction and 113 miles of converted natural gas pipeline.
Phillips 66 Crude & International Supply general manager Glenn Simpson said, "This agreement aligns with a fundamental part of the Phillips 66 business strategy to get advantaged crude to our refineries."
KMP Products Pipelines president Tom Bannigan said, "This pipeline lateral will provide yet another attractive delivery point for customers of our KMCC pipeline while providing Phillips 66 with enhanced access to price-advantaged Eagle Ford crude and condensate."
KMP will also construct five-bay truck offloading facility and three new storage tanks with around 360,000 barrels of crude/condensate capacity at Kinder Morgan’s DeWitt Station, and Wharton Pump Station in Texas.
The company will start the construction of the project in the final quarter of 2012 after receiving the environmental and regulatory approvals.
