BioFuels Journal

KMP to Invest Up to $100 Million in Biodiesel Infrastructure

Houston, TX--Kinder Morgan Energy Partners, L.P. (NYSE:KMP) announced Feb. 28 plans to invest up to $100 million to expand its terminal facilities to help serve the growing biodiesel market.

KMP has entered into long-term agreements with Green Earth Fuels, LLC to build up to 1.3 million barrels of tankage that will handle approximately 8 million barrels of biodiesel production at KMP's terminals on the Houston Ship Channel, the Port of New Orleans and in New York Harbor.

Green Earth Fuels has agreed to build biodiesel production facilities at various KMP terminal sites in these regions and has already begun construction on an 86 million gallon facility at KMP's Galena Park Terminal on the Houston Ship Channel that is expected to commence operations in July 2007.

"Expanding our facilities to store and transfer biodiesel will benefit producers and help meet the country's growing demand for additional energy resources," said KMP Terminals President Jeff Armstrong.

Upon completion, these expansions are expected to be immediately accretive to distribution available to KMP unitholders.

In addition to biodiesel, KMP has significantly increased its handling of ethanol and continues to pursue additional ethanol opportunities in both its terminals and products pipelines business units.

In 2006, KMP handled approximately 1.5 billion gallons of ethanol, almost 30 percent of the domestic ethanol market.

The terminals group currently provides ethanol services at its facilities in Chicago, New York Harbor, Philadelphia, New Orleans, Los Angeles and Houston, while the products pipelines group provides storage and blending of ethanol at its terminals in California, Nevada, Arizona, Virginia and Florida.

"We look forward to continuing to work with producers and shippers to add incremental fee-based services and infrastructure at KMP that will help bring more renewable fuels to markets in the United States," Armstrong said.