Kinder Morgan Energy Partners, L.P.
) has proposed to invest around $170 million for a project that
entails expansion and acquisition of further infrastructure along
the Gulf Coast to support the growing demand for liquids storage
and dock services.
KINDER MORGAN (KMI): Free Stock Analysis
KINDER MORG ENG (KMP): Free Stock Analysis
To read this article on Zacks.com click here.
The total investment of $170 million includes the purchase of 42
acres, developing a new ship dock to manage ocean going vessels
and construction of 1.2 million barrels of liquids storage tanks
in the Houston Ship Channel.
A letter of intent has been signed between Kinder Morgan and a
major unidentified ship channel refiner with the aim to build six
150,000-barrel tanks and four 75,000-barrel tanks. The tanks are
likely to be linked with its Galena Park Terminal and to the
The site will be used to offer dock services for about eight
vessels per month for the refinery and four vessels per month for
The project will be hugely beneficial for the refiners, facing
dock congestion on Kinder Morgan's Houston Ship Channel
terminals. The incremental capacity addition created by the
project, on its completion, will be value accretive for Kinder
Recently, the partnership brought online a crude oil and
condensate pipeline, which can transfer 50,000 bpd of condensate
from the Eagle Ford shale play in south Texas to the Houston Ship
Kinder Morgan 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 strategy.
Kinder Morgan, which acquired stakes of Tennessee Gas Pipeline as
well as El Paso Natural Gas from its parent company
Kinder Morgan Inc.
), holds a Zacks Rank #3, which is equivalent to a Hold rating
for a period of one to three months. Longer term, we maintain our
Neutral recommendation on the stock.