Houston pipeline operator Kinder Morgan has sold its stake in a proposed offshore crude oil export terminal in the Gulf of Mexico known as Texas COLT, the company confirmed Monday.
Financial terms of the deal weren’t disclosed, but Kinder Morgan said Monday in a statement the company sold its stake to Enbridge, the lead developer in the project, Kallanish Energy learns.
Not aligning with priorities
“Given the ongoing commitment required to move this project forward through the regulatory phase and, after an internal review within Kinder Morgan, it was determined that continuing with the project does not align with our strategic priorities,” the company said, in a statement.
Proposed to be built in an area of the Gulf of Mexico roughly 40 miles south of Freeport, Texas, COLT was formally announced fewer than two months ago as a joint venture between Enbridge, Kinder Morgan and German marine terminal operator Oiltanking to accommodate Very Large Crude Carriers, or Vlccs.
Vlccs the tanker of choice
With a load capacity of 2 million barrels of crude, Vlccs are emerging as the tanker of choice for exports, but U.S. ports are too shallow to handle them. A fully loaded Vlcc tanker requires 66 feet of water to safely move, while ship channels on the U.S. coasts are usually between 40 to 45 feet deep.
“Texas COLT is a more strategic and desirable project for Enbridge,” Kinder Morgan said in its statement. “The project aligns with Enbridge’s existing footprint in the U.S. Gulf Coast region and their stated interest in growing their position in the region.”
Includes underwater line, onshore storage
If approved by the U.S. Department of Transportation’s Maritime Administration (Marad), the offshore export terminal would be supported by a 42-inch underwater pipeline connected to an onshore tank farm capable of storing up to 15 million barrels of crude.
The Texas COLT Project also includes an offshore platform and two offshore loading single-point mooring buoys capable of fully loading a Vlcc in roughly 24 hours.
In its statement, Enbridge said the joint venture is moving forward without Kinder Morgan and will still be able to provide multiple varieties of U.S. crude oil for export.
“The COLT partnership, which combines Enbridge’s leading North American asset portfolio with an international petroleum terminaling company in Oiltanking, continues to be central to the strength of the Texas COLT proposal,” Enbridge stated.
The project is expected to be online by 2022.
This post appeared first on Kallanish Energy News.