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Kinder Morgan Announces Southern California Renewable Diesel Hub Project
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Rhea-AI Summary
Kinder Morgan, Inc. (NYSE: KMI) has received commercial commitments to proceed with a renewable diesel hub in Southern California, enabling the transport of renewable diesel (R99) by pipeline, a first in the U.S. The hub will have a throughput capacity of 20,000 barrels per day and represents an investment of over $50 million. Supported by long-term contracts, the hub is expected to be operational in early 2023. This initiative aligns with the company's strategy to expand renewable fuel capabilities and capitalize on California's renewable tax credits.
Positive
Investment of over $50 million in renewable diesel distribution.
First U.S. hub to transport batches of renewable diesel without product loss.
Expected capacity of up to 20,000 barrels per day upon completion.
Supported by long-term customer contracts, ensuring future revenue.
Negative
None.
First mover of segregated renewable diesel (R99) by pipeline
HOUSTON--(BUSINESS WIRE)--
Kinder Morgan, Inc. (NYSE: KMI) today announced the receipt of the necessary commercial commitments to move forward with the permitting and construction of a renewable diesel hub in Southern California. Once constructed, the Southern California renewable diesel hub will enable customers to aggregate renewable diesel batches (R99) in the Los Angeles area and move them on SFPP, L.P.’s pipeline system to the high demand markets in Colton (inland Empire) and Mission Valley (San Diego), California, creating up to 20,000 barrels per day (bpd) of blended diesel throughput capacity at its truck racks with the ability to expand in the future. This Southern California renewable diesel hub, and the previously announced Northern California renewable diesel hub, collectively represent an investment by KMI of over $50 million in the distribution of renewable fuels in California, just over half of which was contemplated in the 2022 budget.
“We are pleased to be constructing these hub projects to expand our renewable diesel handling capabilities,” said KMI’s President of Products Pipelines Dax Sanders. “As refineries are converting to renewable diesel, we believe this is an attractive opportunity to pivot to the energy fuels of the future in a manner that is consistent with our corporate goals and return criteria.” Both projects are supported by long-term customer contracts and are expected to be placed in service in the first quarter of 2023. Capacity is limited and available on a first-come, first-serve basis.
Upon completion, the Southern California hub will be the first of its kind in the United States to transport batches of renewable diesel by pipeline with no resulting loss of product to transmix – a process designed to enable customers to avoid the loss of the valuable California renewable tax credits, including the Low Carbon Fuel Standard (LCFS) credits. The buildout of the Southern California hub consists of three components. At the Carson Terminal in the Port of Los Angeles, KMI is creating community renewable storage capacity with connectivity to both the SFPP pipeline system and the Carson Terminal truck rack. At the Colton Terminal, modifications will create a new dedicated renewable diesel terminal. The renewable diesel will be delivered by the existing 16-inch SFPP pipeline segment from Watson to Colton. The terminal, designed to allow customers to blend their renewable diesel with biodiesel and CARB diesel to desired blends at the truck rack, is expected to accommodate up to 15,000 bpd of blended diesel throughput with expandability up to 20,000 bpd. Lastly, certain storage and truck rack capacity at KMI’s Mission Valley Terminal will be transitioned to enable up to 5,000 bpd of renewable diesel throughput.
About Kinder Morgan, Inc.
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in North America. Access to reliable, affordable energy is a critical component for improving lives around the world. We are committed to providing energy transportation and storage services in a safe, efficient and environmentally responsible manner for the benefit of the people, communities and businesses we serve. We own an interest in or operate approximately 83,000 miles of pipelines, 143 terminals, and 700 billion cubic feet of working natural gas storage capacity. Our pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO2 and other products, and our terminals store and handle various commodities including gasoline, diesel fuel, chemicals, ethanol, metals and petroleum coke. Learn more about our renewables initiatives on the low carbon solutions page at www.kindermorgan.com.
Important Information Relating to Forward-Looking Statements
This news release includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. Generally the words “expects,” “believes,” anticipates,” “plans,” “will,” “shall,” “estimates,” and similar expressions identify forward-looking statements, which are not historical in nature. Forward-looking statements in this news release include express or implied statements concerning the anticipated timing, capacities and benefits of the planned renewable diesel hub facilities. Forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although KMI believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance as to when or if any such forward-looking statements will materialize or their ultimate impact on KMI’s operations or financial condition. Important factors that could cause actual results to differ materially from those expressed in or implied by these forward-looking statements include the risks and uncertainties described in KMI’s reports filed with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year-ended December 31, 2021 (under the headings “Risk Factors” and “Information Regarding Forward-Looking Statements” and elsewhere) and its subsequent reports, which are available through the SEC’s EDGAR system at www.sec.gov and on KMI’s website at ir.kindermorgan.com.
What is Kinder Morgan's new renewable diesel hub in Southern California?
Kinder Morgan's new renewable diesel hub in Southern California will enable the transportation of renewable diesel (R99) by pipeline, with a capacity of up to 20,000 barrels per day.
When is the expected completion date for the renewable diesel hub?
The renewable diesel hub is expected to be operational in the first quarter of 2023.
How much is Kinder Morgan investing in the renewable diesel hub?
Kinder Morgan is investing over $50 million in the construction of the renewable diesel hub.
What are the benefits of the renewable diesel hub for customers?
The hub will allow customers to avoid product loss during transport and benefit from valuable California renewable tax credits.
