By OGJ editors
HOUSTON, Mar. 1 -- Kinder Morgan Energy Partners LP is investing $25 million for a 50% interest in a tank farm at Cushing, Okla., to which a related joint venture will add storage capacity.
Kinder Morgan formed the JV with Deeprock Energy Resources LLC, the construction manager and terminal operator, and Mercuria Energy Trading Inc., which will remain anchor tenant for the next 5 years with an option to extend.
The JV will build three storage tanks with capacity totaling 750,000 bbl. Capacity of the tank farm now is 1 million bbl. Kinder Morgan also entered a development agreement in which it receives an option to participate in future expansions on the remaining 254 acres of Deeprock’s undeveloped land.
Partly because crude in storage at Cushing is at nearly capacity levels, West Texas Intermediate crude is trading at an unusually large discount to Brent Blend crude produced in the North Sea. Both crudes are important market benchmarks.