UPDATE 1-Kinder Morgan to expand Eagle Ford crude pipeline
* Expansion will increase capacity to 100,000 bpd
* Slated to be finished by end of 2013
HOUSTON, May 2 (Reuters) - Kinder Morgan Energy Partners will expand a pipeline under construction to move crude oil from the Eagle Ford shale oil play in Texas to Phillips 66's 247,000 barrel-per-day (bpd) refinery in Sweeny, Texas, the company said on Thursday.
Kinder Morgan is building a 27-mile, 12-inch lateral pipeline to the Sweeny refinery from its 300,000 bpd crude and condensate pipeline that moves Eagle Ford output to the Houston Ship Channel. The larger pipeline started up in June last year.
The lateral pipeline's initial capacity was 30,000 bpd, but Kinder Morgan said it will increase to 100,000 bpd. The company will add new pumps and an additional 120,000-barrel storage tank at its pump station in Wharton County, Texas.
Kinder Morgan also will increase truck offload capabilities at its station in DeWitt County, Texas, to further facilitate the capacity hike.
The lateral project is slated to be finished at the end of 2013.
The Eagle Ford play's close proximity to the U.S. Gulf Coast, home to more than 40 percent of the nation's refining capacity, has given refiners access to growing output that is cheaper than global crudes.
Kinder Morgan also is a major player in developing infrastructure to move that output to refining centers.
The Sweeny lateral's expansion will help that refinery increase its use of Eagle Ford crude as well.
On Wednesday Phillips 66 Chief Executive Greg Garland told analysts that the company aims to run 100 percent cheaper North American crudes -- such as Eagle Ford and heavy Canadian -- within "a couple of years."
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