Posted on 12/08/2014 11:07:54 AM PST by thackney
Research firm Genscape says that after a year-and-a-half of delay, Kinder Morgan's Texas-to-California Freedom Pipeline project has been revived, with changes that the company hopes will attract shippers.
The 250,000 bpd pipeline proposal was shelved in mid-2013 following its failure to receive enough interest from shippers, who said they wanted to transport oil by rail into California, rather than inking long-term pipeline contracts.
However, many of these West Coast companies have confronted crude-by-rail permitting delays amid heightening environment impact scrutiny. But now the modified pipeline plan is much more attractive, Tom Dobson, project director of Kinder Morgan Pipelines, said during the "Moving Crude Supplies to West Coast End Markets" infocast earlier this week.
Since its start, the project has included the conversion of an underutilized gas pipeline to transport Permian crude to Southern California. But the revamped plans also include the building of an atmospheric topping unit in West Texas in order to make and ship blends akin to Alaskan North Slope crude, which Genscape notes is "a California refinery crude slate mainstay."
Dobson conceded that in developing the initial plan, Kinder Morgan misjudged the fact that Permian Basin crudes are becoming lighter and are thus not ideal fits for California refiners.
According to the revamped plans, the topping unit would be able to process 150,000 bpd and able to produce two cuts- condensate gas oils/residual fuels for blending with additional crude, Dobson said.
The condensate could be exported to Asia from third-party docks on the California Coast, and the Freedom Pipeline would batch separate shipments: 100,000 bpd of condensate for export and 200,000 bpd of blended crude with roughly a 31 degree API for California consumption, Dobson said.
Dobson emphasized on the sidelines of the conference that the project's revival has not yet been publicly announced. However, Kinder Morgan is once again engaged in discussions with shipper and hopes to attract a joint venture partner for the project.
Dobson added that it could take between 40-48 months to bring the pipeline into service.
IIRC, during the late 70s rationing era in California a new pipeline project was proposed to run between the Midland junction and Southern California but the ecoturds leapt into action and got it blocked.
Had also heard that some of the Alaska North Slope oil went to Asia because there was not enough refining capacity on the West Coast. Don’t know about that now-a-days.
Only from 1996~2000. It was illegal to export before that. During that time period, about 5% was exported. Since then, a single tanker has carried one load to South Korea.
The West Coast still imports about 1 million barrels a day above their own production, rail and Alaska moved oil.
Here’s another article about KMI’s plans for exporting LNG ...
Cheniere Energy, Inc. (LNG) has a jump start on exporting LNG....expected to commence in late 2015.
Kinder Morgan is not exporting LNG.
Freeport LNG is going to export LNG. They already have pipelines to their facility.
Kinder Morgan is adding another pipeline to the tie the facility into other pipeline systems.
Kinder Morgan to invest $150M in Freeport LNG pipelines
http://fuelfix.com/blog/2014/12/08/kinder-morgan-to-invest-150m-in-freeport-lng-pipelines/
The partnership with S&K is for the engineering and construction.
Cheniere Energy (NYSEMKT:LNG) signs 15-year pipeline capacity agreements with Kinder Morgan (NYSE:KMI) and a multi-year gas storage agreement for the proposed Corpus Christi liquefied natural gas export project in south Texas.KMI will provide 550K dekatherms/day of firm natural gas transportation service and 3B cf of natural gas storage capacity to serve the LNG export facility.KMI will expand its existing Texas intrastate pipeline system in south Texas to provide 250K dekatherms/day of firm transportation and 100% of storage services, and expand its TGP Pipeline to provide 300K dekatherms/day of firm transportation; KMI expects to invest ~$187M on the project.
Thanks for the clarification, thackney
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