Kinder Morgan may ship Texas crude to California, vies with Saudi oil

Texas is poised to join Saudi Arabia as a supplier of oil to California, Bloomberg reports, as the mounting glut of crude on the U.S. Gulf coast makes the trade profitable.

Kinder Morgan Partners (KMP -0.9%) is in talks to ship Texas crude to California through the Panama Canal in a 4,500-mile voyage that would cost ~$10/bbl. making Texas crude competitive with imports traveling 11K-plus miles from Saudi Arabia, the west coast’s largest supplier.

If a shortage of proper ships can be overcome, Texas crude will become affordable on the west coast as the highest U.S. output in a quarter century creates a surplus of light oil and drives down prices.

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Comments (6)
  • Big Bad Bulls
    , contributor
    Comments (324) | Send Message
    How can this be: "the highest U.S. output in a quarter century creates a surplus of light oil and drives down prices."


    Credit Suisse just downgraded the refiners in part due to prices rising...



    Oh the confusion...
    29 Jan 2014, 12:26 PM Reply Like
  • surfgeezer
    , contributor
    Comments (10209) | Send Message
    Credit Suisse is flat wrong. Still listening to KM analyst day, lunch time break, but they showed slides of refineries and how exports are escalating and utilization's are maxing. Biggest problems is infrastructure, not supply costs. Refineries need to revamp because American crude is actually sweeter and lighter than imports.
    29 Jan 2014, 12:58 PM Reply Like
  • Ruffdog
    , contributor
    Comments (3548) | Send Message
    Why not refine the crude in Texas and ship the gasoline to Calif.?


    Or, build a large efficient refinery just south of the Calif. boarder and then ship the product to Calif.?
    29 Jan 2014, 09:02 PM Reply Like
    , contributor
    Comments (588) | Send Message
    Thats all we need. Put our energy eggs into a nest of corruption. Of course Im looking out from a glass house.


    Whenever there is any talk of refinery issues the price of oil shoots up.
    31 Jan 2014, 02:59 AM Reply Like
  • CLUB 198
    , contributor
    Comments (105) | Send Message
    Does anyone NOW question the expansion into shipping?
    Nice move Mr. Kinder!
    29 Jan 2014, 12:37 PM Reply Like
  • User 353732
    , contributor
    Comments (5161) | Send Message
    Kinder Morgan is in the midstream business, which involves all modes of logistics and market access assets: pipelines are only such mode and market access asset; rail, surface and water transportation are others.
    29 Jan 2014, 03:33 PM Reply Like
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