KMEP launches Cochin Reversal condensate shipment open season

Kinder Morgan Energy Partners LP launched a binding open season for its Cochin Reversal Project to move light condensate from Kankakee County, Ill., to existing terminal facilities near Fort Saskatchewan, Alta. The project involves KMEP modifying the western leg of its Cochin Pipeline to connect to the Explorer Pipeline Co. in Kankakee County and to reverse flow to move the condensate northwest.

The project would move about 75,000 b/d of light condensate on Cochin to meet the growing demand for diluent in Alberta drawing from both Eagle Ford shale and US Gulf Coast supplies, KMEP said. KMEP has yet to determine the nature of future eastbound service from Illinois to Windsor, Ont.

KMEP is seeking binding commitments from interested customers for a minimum contract term of 10 years and 5,000 b/d. The open season ends May 31. Subject to shipper support, timely regulatory approvals and necessary capital improvements, light condensate shipments could begin on July 1, 2014.

KMEP cited declining propane production in western Canada and increased natural gas production from US shale formations as driving the project, with propane production in North Dakota expected to rise even as demand for Canadian propane export transportation services wanes. At the same time, the company cited Canadian National Energy Board projections of a more than two-and-a-half fold increase in light condensate demand in Canada, reaching 450,000 b/d by 2025, in explaining the decision to reevaluate its long-term strategy for Cochin.

KMEP held an open season in 2009 to solicit market interest in using Cochin to ship light Bakken crude eastward, the demand for propane shipments already waning (OGJ Online, June 2, 2009). More recently, KMEP contemplated reversing Cochin’s eastern leg to carry Marcellus shale NGLs from Riga, Mich., to the Chicago area (OGJ Online, Apr. 4, 2010). KMEP withdrew its applications for the new-construction portion of this project—a 250-mile pipeline from the Marcellus region to Riga—in February.

Cochin is a 1,900-mile, 12-in. OD multiproduct pipeline operating between Fort Saskatchewan, Alta., and Windsor, Ont. It currently moves propane and ethane-propane mix to Midwestern US and eastern Canadian petrochemical and fuel customers. Explorer Pipeline is a nearly 1,900-mile common carrier pipeline system moving refined petroleum products, feedstock, and diluent from the Gulf Coast throughout the Midwest.

Contact Christopher E. Smith at chriss@ogjonline.com.

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