At the end of July,
Kinder Morgan Energy Partners LP
) and Canada-based midstream operator
) unveiled a 50-50 project to build a crude-oil terminal near
This facility will have the capacity to load 40,000 barrels per day
and will be served by both
Canadian National Railway
Canadian Pacific Railway
The Alberta Crude Terminal will receive volumes from the joint
venture partners' respective gathering systems in the region.
Following on the heels of this announcement, the MLP signed a
letter of intent with
MarkWest Energy Partners LP
) to develop midstream infrastructure to handle natural gas and
natural gas liquids (NGL) produced in the Ohio portion of the Utica
NGLs are a group of heavier hydrocarbons that includes ethane,
propane, and butane - the building blocks of many plastics and
The projects contemplated by this agreement include a
gas-processing plant with a nameplate capacity of 200 million cubic
feet per day.
MarkWest Energy Partners' management team has indicated that the
site could accommodate up to four additional processing plants of
the same size.
In addition, the letter of intent includes an NGL pipeline that
would transport these hydrocarbons to the Gulf Coast for
fractionation, a process whereby the mixed gas stream is separated
into individual components.
Kinder Morgan Energy Partners and MarkWest Energy Partners are also
evaluating the potential construction of a fractionation plant in
either Texas or Louisiana.
Both of these joint venture projects demonstrate yet another avenue
for Kinder Morgan Energy Partners to unlock value from its massive
network of pipelines and other midstream infrastructure.
Yielding 6.4% after the recent pullback, units of Kinder Morgan
Energy Partners rate a buy up to $88 and should deliver annual
distribution growth of 6% to 7%.
Editor's Note: This article was written by Elliott Gue of
& Income Advisor
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