* Plans binding open season for Trans Mountain expansion
* Capacity may rise by "a few hundred thousand barrels"
* Expansion of port facilities to handle bigger tankers
(Adds details and comments)
By Scott Haggett
CALGARY, Alberta, July 6 Kinder Morgan Energy
Partners LP KMP.N plans to gauge shipper interest this fall
for an expansion of its Edmonton, Alberta, to Vancouver
pipeline and in expanded port facilities for overseas oil
Ian Anderson, president of Kinder Morgan's Canadian unit,
said the 300,000 barrel per day line, could likely be expanded
by "a few hundred thousand barrels" as the company prepared to
take a step forward on a concept it has been considering since
Anderson, speaking after a presentation at a Calgary
conference, said a fall open season, where shippers sign a
binding contract for capacity on the line, would determine the
size of an expansion that could be in service by 2015.
"We are talking to the market to try and scope out what
that open season will be, how big it will be and what the
commercial aspects of it will be," Anderson said.
An expansion would provide the first significant route for
Canadian oil exports to Asia and elsewhere and could be
completed years ahead of Enbridge Inc's (ENB.TO) planned
525,000 bpd Northern Gateway line, which would carry Alberta
oil to Kitimat on British Columbia's northwest coast.
However the two lines may be able to co-exist since much of
Trans Mountain's oil could flow to refineries on the U.S. West
Coast seeking to replace declining Alaskan production. As well,
the Northern Gateway project port would be able to handle the
largest crude tankers, while Trans Mountain's Port of Vancouver
facilities can only handle smaller vessels.
"It pushes out the necessity for Gateway for a little bit
but it doesn't remove it," said Chad Friess, an analyst at UBS
Securities. "We need a deepwater port to ship our oil to Asia
... which is the main argument behind Gateway."
Canadian oil producers have been urging development of an
line that would let them tap high-paying Asian markets and West
Coast. The majority of Canada's oil exports currently flow to
the U.S. Midwest, where a glut of crude at the Cushing,
Oklahoma, storage hub has depressed prices.
Moving oil offshore would cut into the glut of Canadian
crude at Cushing and narrow the spread between benchmark West
Texas Intermediate oil - priced a Cushing - and the Brent
benchmark. WTI was once priced at a premium to Brent but was
more than $17 a barrel below the European benchmark on
About 25 percent percent of shipments on the Trans Mountain
line now go to the company's Westridge Dock facility at the
Port of Vancouver, which can only accommodate Afromax tankers
with a capacity of 650,000 barrels.
Kinder Morgan is also planning an expansion of the facility
that would see it able to eventually handle 450,000 bpd, adding
a second berth that could accommodate Suezmax tankers that can
hold one million barrels - though still well below the 4
million barrels the largest tankers can handle.
An expansion of the Trans Mountain system using its
existing right of way is likely to face less opposition than
the Northern Gateway has received, with First Nations along
that line's planned route pledging to block access to their
However the port expansion may face more opposition, with
environmental groups seeking to block additional tanker
"Eighty percent of British Columbians oppose tanker traffic
in our waters," said Jessica Wilson, acting director at
Greenpeace in Vancouver. "Kinder Morgan will face ferocious
(Editing by Peter Galloway)