Kinder Morgan Inc. (KMI) said during its investor day event this week it expects U.S. refined product demand will decline by roughly 1% by 2040, but that dip will be largely offset by rate adjustments, renewable fuels and non-jurisdictional revenue growth.
Dax Sanders, president of products, shed light on how KMI is shifting current West Coast assets to accommodate additional renewable diesel volumes.
At its southern California hub, Kinder Morgan provides about 18 mbbld renewable diesel capacity between the Colton and Mission Valley rack, while also increasing biodiesel blend capabilities by 20% at Colton.
“One of the big catalysts we’re seeing as we talk about these northern California refineries, Marathon and P66, Martinez and Rodeo, those are doing somewhere in the high 20,000 barrels right now, but as they completely convert they’ll be up to 100 thousand barrels a day,” Sanders said. “We expect that the majority of those barrels will start to move on our pipes, continue to increase moving on our pipes and push barrels that are coming to the mid-continent westward.”
Near the Port of Los Angeles, the Carson asset supports approximately 20 mbbld renewable diesel capacity at the rack and is converting 750 mbbl storage capacity to renewable diesel.
As the first company to transport renewable diesel via pipeline to market in the U.S., the northern California hub services about 39 mbbld renewable diesel capacity at truck racks between Fresno, San Jose and Bradshaw.
In the Bay Area, KMI’s Richmond facility is converting roughly 50 mbbl storage capacity to renewable diesel with access to the rack.
Sanders said the company is looking to increase current capabilities from approximately 57 mbbld of renewable diesel moved via pipeline through current hubs by possibly converting Washington and Oregon assets to handle renewable diesel.
“I think we will have an RD conversion project in Oregon this year,” Sanders noted. “I think there’s a good chance that we may have one in Washington as well.”
Sanders stated that there’s always a possibility of converting the company’s chemical facility in Richmond, Calif. into a feedstock facility, but have yet to determine “something that works for everybody” but is in discussions as the nearby refineries develop and convert.
The Houston-based company predicts a 19% increase in natural gas demand for the U.S. and a 98% increase in LNG and Mexican exports by 2030.
Kinder Morgan predicts natural gas demand will grow by 20 bcfd by 2030, with 3 bcfd exported to serve multiple Mexico interconnections.
“The future for U.S. natural gas is very bright and that has positive implications both for our existing business and for our ability to expand,” CEO Kim Dang said Wednesday.
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Reporting by Sydnee Beach, [email protected]; Editing by Bayan Raji, [email protected]
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