Pipeline and energy company Kinder Morgan Energy Partners (NYSE: KMP ) has announced that Kinder Morgan Canada Terminals has agreed to long-term contracts to support the construction of 1.2 million barrels of additional storage capacity at Trans Mountain Pipeline's Edmonton terminal in Alberta, Canada.
The construction of this phase, which will cost $112 million, will begin in the spring and is expected to finish in late 2014. Earlier construction for 3.6 million barrels of storage capacity is already under way, and KMEP expects the storage to come into service by later this year. Total capital investment on the two phases totaling 4.8 million barrels of storage is estimated at $420 million.
Total capacity at the terminal will be 9.4 million barrels after all construction is completed, according to the company.
Kinder Morgan Canada Terminals Vice President Bill Henderson explained the construction in a press release, saying, "The new tanks further demonstrate the strategic importance of Trans Mountain's Edmonton hub and the role it will play in staging Western Canadian crude oil production into export markets, including West Coast markets served by Trans Mountain Pipeline."