Kinder Morgan, IMO to build Edmonton crude oil rail terminal

Kinder Morgan Energy Partners LP

Kinder Morgan Energy Partners LP (NYSE: KMP) and Imperial Oil (IMO) have a 50-50 joint venture to build a crude oil rail-loading facility in Strathcona County, Alberta, Canada, called the Edmonton Rail Terminal.

The facility will be built on heavy industrial-zoned land approximately one-half kilometer southwest of Kinder Morgan’s Edmonton storage terminal, on land adjacent to Imperial’s Strathcona refinery. The Edmonton Rail Terminal is being designed as a crude oil loading terminal capable of loading one to three unit trains per day totaling 100,000 barrels per day at startup, with the potential to expand to 210,000 barrels per day, and ultimately to 250,000 barrels per day.

The new rail terminal will be connected via pipeline to Kinder Morgan’s tank facility and will be capable of sourcing all crude streams handled by Kinder Morgan for delivery by rail to North American markets and refineries. The rail terminal will be constructed and operated by Kinder Morgan and will connect to both Canadian National and Canadian Pacific mainlines.

Imperial Oil will be the base load customer and has subscribed for the startup capacity through a long-term contract. The partners are now actively marketing possible expansion capacity to potential third-party customers. Investment by the joint venture partners for the rail terminal will total $170 million. In addition, Kinder Morgan will invest $100 million in pipeline connections and two new staging tanks to be constructed within the Kinder Morgan Edmonton storage facility. Construction is now underway and completion is scheduled for December 2014.

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