Kinder Morgan is constructing the $200m condensate processing facility near Galena Park terminal on the Houston Ship Channel and will invest $170m to build a second unit.
Once complete, the increased capacity of the processing plant will be 100,000bpd.
As a part of the new investment in the plant, the company will also build an additional 700,000 barrels of storage capacity for product being split at the facility.
Kinder Morgan Energy Partners Products Pipelines president Ron McClain said the long-term throughput capacity agreement with BP will help the company to process its Eagle Ford Shale production and other condensate at the facility.
"Combined with our recently completed Kinder Morgan Crude Condensate (KMCC) pipeline, we are able to provide unparalleled connectivity to crude oil and clean products markets on the Texas Gulf Coast," McClain added.
The processing facility will breakdown the condensate into various components such as light and heavy naphtha, kerosene, diesel and gas oil, and can be further expanded pending additional market interest.
The project is expected to be completed in the second quarter of 2015.