Kinder Morgan Energy Partners; L.P. and Martin Midstream Partners L.P. reported a new joint venture; Pecos Valley Producer Services LLC; to develop a multi-commodity rail terminal in Pecos; Texas.

The new terminal will serve the growing oil and natural gas industries in the Permian Basin. The facility will be constructed and operated by a subsidiary of Watco Companies; Inc.; the largest privately held short line railroad company in the United States.

KMP holds a preferred equity position in Watco.; The terminal will offer a variety of services to producers in the Permian Basin including crude oil hauling; storage; transloading and marketing. It will also provide producers access to light Louisiana sweet crude oil markets.

Kinder Morgan and Martin Midstream Partners will offer immediate NGL storage; takeaway; and fractionation services; and seek to develop natural gas and crude gathering and processing systems within the area. Additionally; the joint venture has held initial discussions to develop a frac sand unit train terminal to service Reeves County and surrounding counties.; The first stage of the terminal is expected to be completed and operational by May 2012.

Tags: Kinder Morgan Energy Partners