Kinder Morgan Energy Partners to build crude pipeline in the US

Kinder Morgan Energy Partners is set to invest $90m towards building a 27-mile lateral pipeline for the transportation of Eagle Ford crude and condensate to Phillips 66’s Sweeny Refinery in Brazoria County, Texas, following an agreement between the companies.

The 12-inch diameter lateral pipeline will extend Kinder Morgan’s Crude Condensate (KMCC).

The pipeline will provide Phillips 66 with a significant portion of the lateral pipeline’s initial 30,000 barrels per day (bpd) of capacity, which can be increased to 100,000 bpd.

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.”

The company will also build associated receipt facilities by constructing a five-bay truck offloading facility, as well as three new storage tanks with approximately 360,000 barrels of crude / condensate capacity at Kinder Morgan’s DeWitt Station in DeWitt County and Wharton Pump Station in Wharton County, both in Texas.

Phillips 66 Crude and International Supply general manager said Glenn Simpson said: “This agreement aligns with a fundamental part of the Phillips 66 business strategy to get advantaged crude to our refineries.”

Construction is scheduled to begin in the fourth quarter of 2012, once the company receives environmental and regulatory approvals.

The existing KMCC employs 65 miles of new-build construction and 113 miles of converted natural gas pipeline to transport crude / condensate from the Eagle Ford shale to the Houston Ship Channel.

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Image: Phillips 66’s Sweeny Refinery is located in Brazoria County, Texas. Photo: courtesy of Phillips 66.