Energy producers look to rail as drilling outpaces pipelines
Jun 12, 2012 | 06:06 PM
| Michael Cowden
Tags
Kinder Morgan,
Gordon Heppell,
Watco,
Allan Roach,
AEP River Operations,
Terrence Moore,
pipeline,
Michael Cowden
TORONTO — As drilling activity ramps up outside of traditional energy-producing states, producers are considering rail and other alternatives to pipelines.
That’s because in some cases, oil and natural gas are being pumped out of the ground more quickly than pipelines can be built to transport it, according to a panel of executives from energy and logistics companies.
Kinder Morgan Inc., for one, wants to expand its pipeline infrastructure to boost transmission capacity from hot shale regions like the Bakken Shale in North Dakota. But the cost would run into the billions of dollars for a capacity expansion, Gordon Heppell, the company’s director of business development, said.
To justify such big investments, Kinder Morgan would need commitments from pipeline users or refineries in the 10- to 15-year range, he said. But potential pipeline users often balk at such long-term commitments, even given current strong oil prices and enthusiasm about oil shales.....
To access AMM's full content, please log in below. If you do not have an AMM account, we invite you to take a free trial or subscribe below.
Already a registered amm.com user?
Access to amm.com editorial content is granted only to paid subscribers and trialists. If you do not have an active account in your own name, please either subscribe or take a trial and you will have instant access to amm.com content. Sharing your login credentials with individuals who are not subscribers represents a violation of AMM copyright.
Every morning, every minute — no matter how often you follow the markets, there's an AMM subscription to fit your needs.
Subscribe Now
Click Here
Not sure if you are ready to invest in a subscription right now? Take a free, no-obligation trial. Start your free trial today.
Take a Free trial
Click Here