Kinder Morgan Energy Partners planning Houston rail project

Kinder Morgan Energy Partners said Thursday that KW Express LLC — a partnership between it and Watco Cos. LLC — struck a deal with Mercuria Energy Trading Co. to build a crude rail project at the Greens Port Industrial Park on the Houston Ship Channel.

“This will be the first major crude by rail destination facility in the Houston area with the ability to deliver into the largest refining complex in the world,” John Schlosser, Kinder Morgan Terminals president, said in a statement. “It will provide U.S. and Canadian producers much-needed market access and optionality to deliver their crude oil production.”

The 210,000-barrel-per-day project will be built at the Greens Port Industrial Park. The company did not disclose its price.

Mercuria Energy Trading will get crude from locations including western Canada,  Cushing, Okla., West Texas, and the Bakken Shale in North Dakota and Montana for delivery by rail into the Houston Ship Channel and distribution to refiners via pipeline and barges.

The facility will have the capability to unload and load up to three unit trains per day of crude oil and condensate as well as provide for up to 100,000 barrel per day of barge loading capacity.

KW Express will own 85 percent of the project and, together with Watco, build and operate it.   Mercuria will own the remaining 15 percent interest.

Kinder Morgan Energy Partners is a pipeline transportation and energy storage company and one of the largest publicly traded pipeline limited partnerships in the United States. It owns an interest in or operates 46,000 miles of pipelines and 180 terminals. The general partner of KMP is owned by Kinder Morgan, Inc.