Kinder Morgan prepares to ship ethanol

By Kris Bevill | April 08, 2008
Web exclusive posted April 14, 2008 at 12:25 p.m. CST

Kinder Morgan, one of the largest pipeline transporters and terminal operators in North America, may be transporting ethanol by pipeline by the end of the year.

The company has begun preparing one of its Central Florida Pipeline Co. pipelines for the shipment of denatured ethanol later this year. Company spokesman Joe Hollier said workers have been replacing gaskets, seals and other components of the petroleum pipeline with ethanol-compatible parts. "This summer, they'll run cleaning pegs through the line to try to get everything out that had run through previously," he said. "Following that, they'll run cleaning batches of ethanol through the line before running a test batch from point A to point B." Because of the preparation that needs to be done, a test batch of ethanol will probably not go through the pipe until the third or fourth quarter of this year, he said.

The pipeline being prepared for the test run has a 16-inch diameter and is 104-miles long running between the Port of Tampa and the Orlando Airport in Florida. The pipeline will be prepared for denatured ethanol transport; however, Hollier cautioned that because the line will be used for gasoline and ethanol in separate batches it would be difficult to prevent some transmixing.

If the initial test run goes well, Hollier predicted Kinder Morgan will do the same for its other pipelines. "If they can prove it's successful, then that'll be a big help," he said. "I'm certain that they would do things along those lines if it makes sense." Increased mandatory blending requirements for petroleum refiners have upped the demand for ethanol in the South and railroad infrastructure hasn't always been able to keep up, so any pipeline method of transport would be valuable, Hollier added.

Kinder Morgan is also a major terminal operator and by April 15 will complete work to blend ethanol at its terminal in Athens, Ga., according to Hollier. "We are blending at Athens now on two of four possible lanes," he said.

During April, the company will also begin offering ethanol blending at a half-dozen additional terminals including: Richmond, Va.; Chesapeake, Va.; Greensboro, N.C.; Selma, N.C.; Tampa, Fla., and Orlando, Fla. Hollier said Kinder Morgan will begin offering ethanol transport via truck at its Charlotte, N.C. location in June.

The new blending facilities are not capable of handling unit trains but Hollier said Kinder Morgan is "working closely" with others to provide the capability in as many locations as possible.

More blending terminals will help alleviate some of the strain created by increased blending mandates which has been placed on the shipping infrastructure in the South. "We expect to provide automated ethanol-blend capability in many large markets where it is not widely available today in the Southeast," said Hollier. "[And] the ability to move ethanol via pipeline could potentially open up many new markets to ethanol blending in the future."