Kinder Morgan Takes 15 Terminals Off BP's Hands in $350 Million Joint-Venture Deal

Researched by Industrial Info Resources (Sugar Land, Texas)--BP plc (NYSE:BP) (London, England) has agreed to form a limited liability company with Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas) that will acquire 15 of BP's refined products terminals in the U.S., with related infrastructure, for about $350 million. Kinder Morgan will operate 14 of the terminals as part of the joint venture, and fully own the 15th. Industrial Info is tracking almost $1.6 billion in active projects in the global Terminals Industry involving Kinder Morgan.

Kinder will have a 75% interest in the joint venture, while BP will own 25%. BP will continue to use the terminals as distribution hubs for refined products, such as gasoline. The joint venture also hopes to also sell capacity to third-party customers.

According to BP, the terminals sold can store about 9.5 million barrels of refined products and are located across the U.S.

Among the Kinder Morgan projects tracked by Industrial Info is the $115 million addition of a loading and unloading dock at the company's refined petroleum terminal in Galena Park, Texas. The project, now under construction, involves building a fifth ship dock and 1 million barrels of additional oil products storage, bringing the total storage capacity to 8 million barrels. The docks then will be capable of loading vessels at rates of up to 15,000 barrels per hour. The addition is expected to be completed in second-quarter 2016.

The deal with BP is just the latest for Kinder Morgan, which has stepped up is pace in acquisitions this year. In July, the company acquired Royal Dutch Shell PLC's (NYSE:RDS.A) (The Hague, Netherlands) interest in the Elba Island LNG Liquefaction Plant in Savannah, Georgia. For more information, see July 17, 2015, article - Kinder Morgan's Growth in Bakken, Eagle Ford Shales Offsets Weak Commodity Prices in Second-Quarter 2015.

Earlier this year, Kinder Morgan also acquired pipeline and logistics company Hiland Partners for about $3 billion. The acquisition gave Kinder Morgan a solid foothold in North Dakota's booming Bakken Shale. For more information, see June 24, 2015, article - Midstream Acquisitions and Mergers Abound Since February.

Doug Sparkman, BP's chief operating officer for the North American fuel segment, said the deal "enables BP to maintain strategic access to terminals nationwide, while reducing operating costs and complexity." In recent years, BP has been selling off assets to pay for liabilities related to the Deepwater Horizon disaster in the Gulf of Mexico in April 2010. To date, the tragedy has cost the company nearly $54 billion pre-tax--including more than $20 billion, announced by the U.S. Department of Justice earlier this month, to settle all federal and state claims.

While the terminals sold are a major divestment for BP, the company will maintain ownership of others, information on which can be found in Plant Profiles below:

• Whiting, Indiana
• Dubuque, Iowa
• Port Newark, New Jersey
• Portland, Oregon
• Seattle, Washington

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.