Kinder Morgan cancels Freedom crude oil pipeline

Kinder Morgan Energy Partners announced May 31 it canceled plans for a crude oil pipeline project designed to run from Texas to California. According to The Associated Press, Kinder Morgan canceled the Freedom pipeline project, consisting of a mix of converted natural gas pipelines and new construction, because there weren't enough refineries interested in the project.

The source said the $2 billion project would have carried as many as 277,000 barrels of oil per day. Valero Energy Corp. and Tesoro Corp. were two companies that said they were more interested in continuing to receive their crude deliveries by railcar.

Fears of longer-term commitments to taking pipeline oil from West Texas were raised by the refineries. According to the report, the companies have more flexibility to shop among crude oil from oil fields including the Bakken oil field in North Dakota

"We stated at the outset that we would not move forward with the project without customer support, and we did not receive enough interest for us to commit to building the project at this time," said Mark Kissel, Kinder Morgan's president of West region gas pipelines.

If the market expresses further interest in the pipeline, the company could revive the project. Until then Kinder Morgan will continue delivering crude oil by rail car to its West Coast and Texas locations.

Visit PennEnergy's research area to learn more about crude oil production in the United States.

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