Biodiesel infrastructure to get $100 million boost from Kinder Morgan

By | April 06, 2007
Kinder Morgan Energy Partners LP (KMP), whose parent company Kinder Morgan Incorporated is one of the largest midstream energy companies in North America, announced in late February an investment amounting up to $100 million at three of its U.S. terminals, a move that is expected to serve the biodiesel markets well.

Up to 54.6 million gallons (or 1.3 million barrels) of additional tankage is expected from this investment, and will assist in handling up to 336 million gallons (8 million barrels) of biodiesel refined at KMP terminals in the Houston Ship Channel, the Port of New Orleans and in New York Harbor by Green Earth Fuels LLC. "We look forward to continuing to work with producers and shippers to add incremental fee-based services and infrastructure at KMP that will help bring more renewable fuels to markets in the United States," said Jeff Armstrong, KMP terminals president.

Green Earth Fuels is a biodiesel start-up company with an experienced team and big investor-owners, including Riverstone Holdings LLC, the Carlyle Group and Goldman Sachs. Construction of Green Earth Fuel's first biodiesel project has been underway since September 2006 at Kinder Morgan's Galena Park Terminal in the Houston Ship Channel. When complete, the plant will have the capacity from two separate production lines to produce 86 MMgy. Green Earth Fuels anticipates the first 43 MMgy line to be operational by July 2007, while it expects the second production line to be running as early as September. The future producer said its large Houston Ship Channel plant is feedstock-flexible.

KMP's $100 million announcement in late February followed the midstream energy company's September 2006 announcement to invest up to $195 million in storage capacity at its Galena Park and Pasadena terminals on the channel, in addition to a cross-channel pipeline to increase the connectivity of the two facilities. The two terminals are the western Gulf Coast refining community's central interchange point, consisting of 840 million gallons (20 million barrels) of total storage capacity.
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