Freedom pipeline again fails to garner support

OREANDA-NEWS. April 23, 2015. Kinder Morgan has not received enough interest from customers to go forward with a plan to reverse and convert to oil and condensate service the Freedom pipeline from west Texas to California.

The 277,000 b/d project was being reimagined as a possible condensate export line after initially failing to garner enough support as an oil line. The Wink, Texas, to San Emidio, California, line as proposed in 2013 would have been built using new and converted natural gas lines and carried a \\$5/bl tariff. That plan was put aside after major California refiners stepped forward to say they were not interested and would prefer to take crude by rail.

"We've had a lot of interest on both sides [producers and refiners] but not to the extent that we've been able to get somebody to take that capacity and say, ‘I'll sign up for 15-20 years,'" chief executive Rich Kinder said today at the IHS CERAWeek conference in Houston, Texas.

The 300,000 b/d Kinder Morgan Crude and Condensate pipeline (KMCC) from the Eagle Ford to Houston, originally had commitments for 50,000 b/d but now is nearly fully contracted and moving a little more than 200,000 b/d.

Low oil prices are suppressing some growth in midstream projects, but the Eagle Ford and Permian basin in Texas still have a lot of opportunities, Kinder said. The company expects to expand its \\$3bn purchase of Bakken midstream firm Hiland Partners from Continental Resources chief executive Harold Hamm.

"We take a very long range view that we will be able to leverage off of there and build a franchise there just like we've done on the Eagle Ford," Kinder said.