A unit of leading master limited partnership
Kinder Morgan Energy Partners L.P.
) - Kinder Morgan Canada Terminals - is progressing with the
construction of another 1.2 million barrels of merchant storage
capacity at Trans Mountain Pipeline's Edmonton terminal in
Strathcona County, Alberta. The project is backed by several
BP PLC (BP): Free Stock Analysis Report
KINDER MORG ENG (KMP): Free Stock Analysis
STATOIL ASA-ADR (STO): Free Stock Analysis
SUNCOR ENERGY (SU): Free Stock Analysis
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The work on the new tankage, which awaits the receipt of
supporting permits, is expected to begin in spring 2013. With
completion scheduled for late 2014, the total cost of Phase 2 is
estimated at around $112 million.
The construction of Phase 1 of the expansion is ongoing and
comprises of 3.6 million barrels of new storage. The entire
capacity of Phase 1 is anticipated to be commissioned toward the
end of 2013. Total capital cost for the combined 4.8 million
barrel capacity is pegged at about $420 million and is backed by
long-term contracts with major producers and refiners.
Upon completion of both the phases, the total storage capacity at
the Edmonton facility will be 9.4 million barrels, together with
the existing Trans Mountain system facility and the North 40
The addition of new storage tanks is part of the partnership's
proposed $5.4 billion expansion on its Trans Mountain Pipeline
between Alberta and Vancouver.
The project trails along the recently unveiled plans of Kinder
Morgan for the expansion of its proposed Trans Mountain pipeline,
which has received commitments from 13 customers. These customers
have entered into 15-20 year contracts for 700,000 barrels a day
of oil to be delivered through the Alberta-to-Burnaby pipeline.
Of these customers, Canadian Natural Resources Ltd., Canadian Oil
Sands Ltd., Imperial Oil Ltd.,
) Canadian affiliate - Statoil Canada Ltd - and the marketing
Suncor Energy inc.
) and BP Canada -
) Canadian unit - are worth mentioning.
Kinder Morgan holds a Zacks Rank #3, which is equivalent to a
Hold rating for a period of one to three months.