KMEP to build 900,000-bbl ULSD capacity at Bostco

Kinder Morgan Energy Partners LP is adding 900,000 bbl of ultralow-sulfur diesel (ULSD) storage at its 185-acre Battleground Oil Specialty Terminal Co. LLC (Bostco) site on the Houston Ship Channel. A long-term leased storage and handling services contract with Morgan Stanley Capital Group Inc. underwrites the expansion and includes six 150,000-bbl tanks, additional pipeline and deepwater-vessel dock access, and 30,000 bbl/hr loading equipment.

KMEP expects to start work on the expansion later this quarter for an in-service date of fourth-quarter 2014. Bostco will be able to handle ships with drafts up to 45 ft (OGJ Online, Nov. 9, 2011).

A joint venture of KMEP, which owns 55% of Bostco and will operate it, and TransMontaigne Partners LP, expects the terminal at mile marker 43 on the Houston Ship Channel to begin commercial operations next quarter. This expansion will bring Bostco’s capacity to 7.1 million bbl of fully subscribed ULSD, residual fuels, and other black oils, divided among 57 tanks.

The expansion will cost $54 million, with KMEP estimating Bostco’s total price at $485 million.

Contact Christopher E. Smith at chriss@ogjonline.com.

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