Kinder Morgan Energy Partners and BP have executed long-term commercial agreements under which BP will be provided with the condensate processing services and storage provision at Kinder Morgan’s terminals located on the Houston Ship Channel in the US.

As per the agreement Kinder Morgan will process BP’s over 40,000 barrels per day (bpd) at its petroleum condensate facility and break the condensate into different components such as light and heavy naphthas, kerosene and gas oil.

BP integrated supply and trading business chief executive Paul Reed said the project would help unlock additional domestic energy production and offer US producers an alternative home for their condensate barrels.

"This long-term commitment demonstrates BP’s desire to provide its customers with flexibility in managing their feedstock and product needs and enhances our strategic relationship with Kinder Morgan," Reed added.

Kinder Morgan Products Pipelines president Tom Bannigan said the contracts with BP reflect continued strong demand to bring Eagle Ford Shale production to the Gulf Coast.

"Our splitter facility combined with our Eagle Ford to Houston crude/condensate pipeline and associated Houston Ship Channel storage facilities offer customers like BP unparalleled connectivity to the full range of Gulf Coast markets including refineries, chemical companies, gasoline blenders, outbound pipelines and marine facilities," Bannigan added.

The Kinder Morgan’s $200m facility has been designed to produce up to 100,000 bpd in future.

The expansion is part of Kinder Morgan’s approximately $75m investment to construct five tanks that will connect to its condensate facility with new piping, manifolds and pumps.

BP, under the agreement, will also lease an additional 750,000 barrels of storage that Kinder Morgan will add at its Galena Park terminal.

The project will see construction of five tanks that will connect to its condensate facility with new piping, manifolds and pumps.

The company expects the new storage tanks and condensate facility to be in service in the first quarter of 2014.