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Kinder Morgan Management LLC Message Board

  • barry_obummer barry_obummer Jun 2, 2013 3:17 PM Flag

    "focus to crude by rail projects"?

    WSJ article this weekend ("Kinder Morgan ends pipeline plan for west coast") stated:

    "Kinder Morgan Energy Partners said it will now switch its focus to crude-by-rail projects in Texas and California."

    Has anybody heard what their plans are for "crude-by-rail projects"?

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    • Never mind.

      Kinder Morgan has a JV with Watco explained in terminal section on website.

      • 2 Replies to barry_obummer
      • The terminal in Texas does not explain what they have in mind for crude-by-rail in California. Kinder Morgan's lack of shipper interest suggests that, for now, there's not much interest in new pipelines, at least from Texas. Kinder Morgan said it was focusing on rail deliveries from Texas oil fields for the short term.

        While pipelines are the cheapest way to move oil, there aren't enough of them. Train shipments are more expensive than rail, but rail has more diversity. Rail is more flexible, and from a refiners standpoint faster than moving by pipeline. Rail cars achieve top speeds of around 50 to 60 mph while pipelines typically ferry crude at only 10 to 20 mph.

        San Francisco already has oil sand coming in by rail from Canada. It is just a matter that pipelines are safer than rail or truck. The risk of a train spill is six times greater than a pipeline incident. Pipelines are the cheapest way to move oil, and there aren't enough of them built yet to do it. This bottleneck is the opportunity.

        The rail company most poised for growth is Canadian National Railway (CNI), which owns Athabasca Northern Railway, the key and sole link to the Athabasca oil sands in Alberta.

      • They hve a joint venture to build a terminal in Houston to serve crude-by-rail in a JV with Watco.


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