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

|About: Kinder Morgan Energy Partne... (KMP)|By:, SA News Editor

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.