Kinder Morgan Energy Partners LP
) is planning to invest roughly $58 million for the expansion of
its chemical storage capacity. As part of the arrangement, the
partnership has inked a long-term deal with Canadian chemical
Per the agreement, Methanex will support the building of a
methanol storage capacity close to Kinder Morgan's liquids
terminal in Geismar, La. The partnership will be the operator,
owner and constructor of the storage tanks and related
infrastructure. Kinder Morgan will also make an improvement of
its existing dock at the Geismar Liquids Terminal (GLT).
The terminal storage facility will provide marine, rail and truck
access to a methanol production plant of Methanex, which will be
shifted from Chile, South America to Geismar. The terminal
infrastructure is expected to start operation by the second half
of 2014. The relocated methanol production plant is also
anticipated to be in service by that time.
Kinder Morgan is the largest independent owner and operator of
petroleum product pipelines in the U.S. It is one of the largest
publicly traded master limited partnerships (MLPs) and generally
serves as a benchmark for the pipeline MLP group.
A focus on fee-based and diversified businesses has enabled
the partnership to spread its business risks. In addition, the
CO2 business is a major growth avenue for the partnership with
the commodity price risk being offset by a long-term hedging
CALUMET SPECLTY (CLMT): Free Stock Analysis
KINDER MORG ENG (KMP): Free Stock Analysis
METHANEX CORP (MEOH): Free Stock Analysis
RANGE RESOURCES (RRC): Free Stock Analysis
To read this article on Zacks.com click here.
However, Kinder Morgan's distribution growth prospects are
closely linked to the successful completion of the organic growth
projects, which in turn might be adversely affected by
operational hindrance, cost inflation and overruns, and delays in
Kinder Morgan currently retains a Zacks Rank #3 (Hold), implying
that it is expected to perform in line with the broader U.S.
equity market over the next one to three months.
Two firms in the energy sector that are expected to significantly
outperform the equity markets in the next one to three months are
Calumet Specialty Products Partners LP
Range Resources Corporation
). Both of these stocks carry a Zacks Rank #1 (Strong Buy).