Kinder plans Cochin pipeline reversal

Kinder morgan energy partners has announced plans to reverse flow on its 3,000-kilometre Alberta-toOntario Cochin pipeline to move condensates west to the oilsands.

The Houston-based energy and pipeline company said Monday it was seeking binding contracts from shippers interested in moving the light hydrocarbon from the United States into a storage terminal at Fort Saskatchewan.

Should the open season be successful, Kinder Morgan would modify the bulk of the Cochin pipeline to flow 75,0000 barrels per day condensate northwest by 2014. The line currently runs propane and ethane/propane shipments east to petrochemical facilities in Windsor, Ont.

“Our proposal will provide the rapidly growing Canadian market with very cost-effective access to light condensate from both the Eagle Ford Shale and the U.S. Gulf Coast,” said Don Lindley, vice-president of business development for KMP’S Products Pipeline group.

Demand for condensateis expected to double to 400,000 bpd by 2020 in Alberta’s oilsands region, driving up price differentials between the U.S. and Canada

“The question isn’t whether condensate is worth more in Edmonton, it is,” said Steven Paget, analyst with First energy Capital Corp. “The question appears to be how much more is it worth.”

The reversal makes sense particularly because the Cochin pipeline has been running at about a third of capacity, Paget said.

The project would entail Kinder Morgan building a terminal in Illinois connecting to the Explorer Pipeline system running refined oil products and diluent north from Pasadena, Texas, then reversing the product flow to move the condensate northwest to Canada.

The binding open season ends May 31, Kinder Morgan said.