HOUSTON -- The nation's largest oil and natural gas storage and transportation provider said it will make a major investment to expand this city's port and refined products export capacity.

Kinder Morgan Energy Partners LP, a division of Kinder Morgan Inc., announced yesterday that it will spend around $170 million to acquire land and build new facilities at its Houston Ship Channel terminal. The announcement marks Kinder Morgan's latest large investment in Houston's ports, after it broke ground last year on a new liquids storage hub that will add 50 distillate and black oil tanks along the channel. The company is also spending millions to expand existing infrastructure located in the east Houston suburb of Galena Park.

For this latest move, Kinder Morgan says it is partnering with an unnamed refining company to build 1.2 million barrels' worth of liquid storage capacity. Company representatives said the deal involves the purchase of 42 acres of land on which 10 high-volume storage tanks will be built.

Kinder Morgan also said it will build a new ship dock at the port as part of this new project. The dock will be able to service up to eight ships a month for an adjacent refinery and four ships per month for Kinder Morgan's own terminal, increasing the port's ability to send refined products like diesel to major demand centers in Latin America and around the world.

Kinder Morgan Terminals President Jeff Armstrong said in a release that the investment is needed to alleviate growing congestion caused by rising refined product export volumes. Six of the tanks to be built will be able to hold 150,000 barrels each, and the remaining four will be 75,000-barrel-capacity tanks.

Last month Kinder Morgan took on a partner for an even larger project under development at the Ship Channel.

TransMontaigne Partners LP announced that it had spent $79 million to purchase a 42.5 percent stake in Kinder Morgan's Battleground Oil Specialty Terminal Co. LLC (BOSTCO), a project to build a new black oil terminal at the port. BOSTCO will be used to handle feedstock fuels, liquid distillates and other products used for bunker fuel or in other applications.

The much larger BOSTCO project will involve 50 tanks capable of storing more than 6 million barrels of liquids. TransMontaigne Partners told investors the BOSTCO project will cost about $425 million to build but "will be well positioned to capitalize on increasing exports of petroleum-related products" from the Houston region.

Customers are also helping Kinder Morgan finance much of these massive new expansion projects.

In July, the company announced that oil and gas supermajor BP PLC had agreed to pay for about 750,000 barrels' worth of new liquids storage capacity Kinder Morgan is adding to its Galena Park facilities. Kinder Morgan puts the estimated cost of that separate project at $75 million.