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Pipeline operator: Don't blame us

Feb. 3, 2014 | 0 comments


A pipeline company, which operates a dedicated conduit for propane from the production fields in Canada, wants the public to understand that their pipeline is open and operational — and that it is not to blame for the current propane situation.

The pipeline has been mentioned in news stories — and cited as part of the cause for the current propane shortage. It was mentioned by Gov. Scott Walker in his discussions of the propane shortage last week as well as cooperative leaders and other officials.

Kinder Morgan, the company that owns and operates the Cochin pipeline wants the public to know that it is fully operational and is in fact being underutilized.

After Wisconsin State Farmer published a story on the propane shortage last week, we were contacted by the firm, which operates the shipping conduit for propane and other products.

A spokeswoman, Melissa Ruiz, said the company didn't want the story to be that the pipeline is not operational. She said they wanted to set the record straight and contradict the many mentions of the pipeline in the press.

The Cochin pipeline is a 1,900-mile pipeline (12-inch diameter) between Fort Saskatchewan, Alberta and Windsor, Ontario with five U.S. terminals — in Carrington, ND, Benson and Mankato in MN, New Hampton, IA and Milford, IN.

Ruiz explained that the pipeline transports propane and other products for third-party shippers-customers. With an estimated capacity of 50,000 barrels per day, it is not being contracted to its fullest capacity, she said.

The story may have gotten started because the pipeline was down for a short time this fall.

There was an "outage" of the Cochin pipeline, she said, from Nov. 27-Dec. 17, but it was planned and all the customers who use it were aware it would be happening. The pipeline was back in full operation on Dec. 18, she added.

"Every system has planned maintenance, and this one was not a surprise," she said.

Even now, with propane shortages and high prices, with suppliers and farmer-cooperatives going as far away as Kansas and Texas to find propane, Ruiz says the Cochin pipeline is being underutilized.

"Even in the current situation it is not being used at 100 percent," she told us.

"Contrary to some erroneous reports, the Cochin pipeline is fully operational and capable of transporting propane at full capacity," the company said in a written statement, "and there is propane available at our five U.S. terminals for pick-up and re-delivery by our shipper-customers who own the propane in our pipeline."

The owners and operators of the pipeline act much like a trucking company, Ruiz explained, delivering product for others and do not own the propane being transported in it.

The Cochin pipeline is currently operating as a dedicated propane system between Alberta and Iowa, she said, and the propane received into the pipeline from third-party storage facilities in Fort Saskatchewan, Alberta and Regina, Saskatchewan "can be delivered immediately to the U.S. terminals."

The company statement said that if shippers request that additional propane be transported through the pipeline "we currently have capacity available to handle such shipments."

Kinder Morgan charges shippers for the transport of products on the Cochin pipeline through tariffs filed with the National Energy Board of Canada (NEB) and the U.S. Federal Energy Regulatory Commission (FERC.)

The company noted that the tariffs are not dependent on the market price of propane and have not increased since they went into effect in April 2013.

The current situation in the propane market is not a result of the Cochin pipeline's system capacity or its operation, Ruiz said.

"We stand ready to provide additional transportation and terminalling services to our shipper-customers to meet the propane needs in the markets they serve."

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