Kinder Morgan builds out Gulf Coast logistics hub in U.S. oil boom

To capitalize on a flood of domestic and Canadian crude into the U.S. Gulf Coast, logistics giant Kinder Morgan Energy Partners is spending more than $1.5 billion in Houston to build the most flexible oil and fuel transport hub in the country.The company’s expanding infrastructure smorgasbord includes a bit of almost everything at the increasingly crowded Houston Ship Channel – all next door to the biggest concentration of refiners in the country.The buildout, executives say, responds to the increasingly dynamic world of physical crude trading in North America, where the variety of available crudes is growing, and is aimed at securing their central position in moving oil from the U.S. shale boom to market.Customers want multiple options to switch delivery modes on a dime and snag the best price for refinery feedstocks. They need more dock and storage space to handle surging volumes of fuel being shipped overseas.”More of them are producing more than they can consume in the United States. So they want to take it to water, either for movement up and down the coast … or to export because you see a tremendous amount of growth,” John Schlosser, president of Kinder Morgan’s terminal division, said of refiners.Schlosser, who spoke to Reuters on a tour of the company’s facilities, said the company was doubling down on its core business.”Our bread and butter is the midstream – that’s where we’re making all of our investments,” he said. “It’s like connecting the dots.”Kinder’s latest push is to add storage and pipeline connections to final domestic destinations, a huge oil-by-rail offloading operation, and a wider export platform.

via Kinder Morgan builds out Gulf Coast logistics hub in U.S. oil boom | Reuters.

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