Independent terminal operator Kinder Morgan expects to achieve a 20% growth in its terminals business due to a string of expansions across its network.
Chairman and CEO Richard Kinder says that the increase in first quarter earnings of 16% was led by strong performance at its liquids terminals, driven by various expansions across the network. First quarter earnings before DD&A and certain items of $264 (€245) million, up from $228 (€212) million.
The acquisition of the Jones Act tanker also contributed significantly to growth as did the contributions from the recently acquired Vopak terminals.
Kinder says: ‘Earnings were impacted by a softening of the domestic steel market, with volumes down 24% compared to the first quarter of 2014.’
For the first quarter, terminals and products pipelines combined handled 25.9 million barrels of ethanol, down from 26.2 million barrels for the same period last year.
As previously reported, in March Kinder Morgan announced a new 50-50 joint venture with Keyera Corporation to construct a new crude oil storage terminal in Alberta. The project involves the construction of 4.8 million barrels of crude oil storage at the facility called the Base Line Terminal.
Once complete, Kinder Morgan will have nearly 12 million barrels of merchant storage in the Edmonton market.
Work continues at various Kinder Morgan facilities along the Houston Ship Channel to help meet customers’ growing demand for refined product storage and dock services. At the Kinder Morgan Export Terminal along the Houston Ship Channel, construction continues on a new ship dock to handle ocean vessels, 12 tanks with 1.5 million barrels of liquid storage capacity, two barge docks and cross-channel pipelines. This approximately £189 million project is supported but a long-term contract with a major ship channel refiner and will connect to Kinder Morgan’s Galena Park terminal. It is expected to be complete in the first quarter of 2017.
The final three tanks of a nine-tank, 1.2 million barrel build were placed into service in the first quarter at Kinder Morgan’s Galena Park terminal, as work continues on a new barge dock. The dock at Pasadena is expected to be in service by year end and will provide capacity to hand up to 50 additional barges per month.
In February, Kinder Morgan also completed its purchase of three terminals and one undeveloped site from Vopak for $158 million. The acquisition included a 36-acre, one million plus barrel storage complex along the Houston Ship Channel, two terminals in North Carolina and an undeveloped site at Perth Amboy, New Jersey.
This purchase increased Kinder Morgan’s liquids storage capacity by more than 2.2 million barrels.