KMEP, Watco to build Houston crude-by-rail terminal

KW Express LLC, a partnership of Kinder Morgan Energy Partners LP and Watco Cos. LLC, has agreed with Mercuria Energy Trading Co. Inc. to build a 210,000 b/d crude oil rail and barge terminal at the Greens Port Industrial Park on the Houston Ship Channel. Mercuria will source crude from Cushing, Okla., West Texas, the Bakken shale area, and western Canada into the HSC for distribution to refiners via pipeline and barges.

The terminal will unload and load up to three unit trains/day of crude and condensate and provide up to 100,000 b/d of barge loading capacity. KW Express will own 85% of the project and will build and operate it. Mercuria will own the rest.

KMEP last year formed a joint venture with Martin Midstream Partners LP to develop a Permian basin crude and NGL rail terminal in Pecos, Tex. (OGJ Online, Feb. 27, 2012). A Watco subsidiary built and operates the terminal Watco’s eighth shale oil crude-by-rail terminal.

Mercuria joined KMEP and Deeprock Energy Resources LLC as anchor tenant in a 2011 joint venture to add 750,000 bbl of crude storage at Cushing (OGJ Online, Mar. 1, 2011).

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