Pipeline Profiles: Cochin Pipeline

Sources: Kinder Morgan Cochin ULC, NEB

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The Cochin Pipeline (Cochin) is a multi-product system spanning from Fort Saskatchewan, AB, to Windsor, ON. At Windsor it connects with the Windsor-Sarnia pipeline (owned by Plains Midstream). Cochin was in eastward propane service between Fort Saskatchewan and Windsor until March 2014, when it was reversed to transport condensate westbound from its connection point with the Explorer pipeline in Kankakee County, IL to Alberta. The Eastern Portion of Cochin (from Illinois to Ontario) maintains a tariff for ethane-propane mix from the Canada-U.S. border to Windsor.

In 2016, condensate throughput at Ft. Saskatchewan averaged 13.37 thousand cubic metres per day (84.11 thousand barrels per day).

Throughputs at Fort Saskatchewan are imports. At Fort Saskatchewan, the condensate delivered from Cochin is mostly shipped on connecting pipelines to oil sands production sites to be used for heavy oil blending.

In 2016, refined petroleum products throughput at Windsor averaged 0.04 thousand cubic metres per day (0.25 thousand barrels per day).

Throughputs at Windsor are imports. At Windsor, the Cochin pipeline connects with the Windsor-Sarnia pipeline (owned by Plains Midstream), which delivers liquids to the fractionators and refineries in Sarnia.

The physical capacity of a pipeline is based on many factors such as the product(s) being carried, direction of flow, ambient temperature, pipeline compression, and maintenance work or other pressure restrictions. The operational capacity at each key point may also reflect contracts for transportation service, and supply and demand across the system. The actual physical capacity of the pipeline may be higher than the assumed operational capacity stated here.

Open data can be freely used, modified and shared by anyone for any purpose. The data for these graphs are available here.

Key Developments

Last updated: August 2016

In May 2013, the Board approved an application for the reversal of the Western Portion of Cochin to enable the transport of condensate from Illinois to Ft. Saskatchewan, AB. The reversed pipeline started operations in July 2014.

Kinder Morgan is moving ahead with the Utopia East Pipeline Project to transport NGLs from the Utica basin using the Eastern Portion of Cochin. A tolls and tariffs application for the transportation of ethane-propane mix and ethane for the Eastern Portion of Cochin was filed with the Board in November 2015. In March 2016, Kinder Morgan Cochin ULC applied to the Board to transfer ownership of the Eastern Portion of Cochin to Kinder Morgan Utopia ULC.

Regulatory Documents

Last updated: August 2016

Tolls

Last updated: August 2016

Cochin provides condensate service to committed shippers from Illinois based on international joint tolls. On the other hand, uncommitted service is provided with an uncommitted toll for local Canadian shipments or an international joint toll for shipments originating in the U.S.

In 2014, the international joint toll for committed service was US$4.950/b, and the uncommitted joint rate was US$7.500/b. The Canadian local toll averaged $23.62 per m³ ($C 3.76/b). In 2015, the international joint toll for committed service averaged US$5.0635/b, and the uncommitted toll averaged US$7.5776/b. The 2015 Canadian local toll averaged $23.92 per m³ ($C 3.80/b).

Financial

Last updated: August 2016

Cochin has been regulated on a complaint basis since 1986 and is allowed to earn a return of 5.75 to 8.25% on its rate base. It earned the minimum return from 2010 to 2014 and in 2015 (the first full year of condensate import service) it realized the maximum allowable return. Credit ratings are not available for Kinder Morgan Canada Company or Kinder Morgan Cochin ULC. Kinder Morgan Canada, which owns Kinder Morgan Cochin ULC, represents approximately 2% of its parent company’s (Kinder Morgan Inc.) earnings.

Table 1: Kinder Morgan Cochin ULC – Yearly
Kinder Morgan Cochin ULC 2010 2011 2012 2013 2014 2015
Revenues (millions) $22.77 $40.07 $25.52 $19.10 $29.89 $49.65
Average Rate Base (millions) $84.03 $80.78 $76.26 $74.47 $106.68 $146.10
Return on rate base 5.75% 5.75% 5.75% 5.75% 5.75% 8.25%

 

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