US energy infrastructure company Kinder Morgan is planning a renewable diesel hub in southern California, US.
The company says it has received the necessary commercial commitments to move forward with the permitting and construction of the hub, which will enable its customers to aggregate renewable diesel batches (R99) in the Los Angeles area and move them on the SFPP pipeline system to the high demand markets in Colton (inland Empire) and Mission Valley (San Diego), California. This will create 15,000 bpd of blended diesel throughput initially, which is expected to expand up to 20,000 bpd.
Construction of the hub will involve three of Kinder Morgan’s terminals. At its Carson Terminal in Los Angeles, the company is increasing renewable storage capacity which connects to the SFPP pipeline and the Carson Terminal truck rack. It will modify its Colton Terminal to create a dedicated renewable diesel termina, with diesel delivered by the SPFF from Watson. The modified terminal will allow Kinder Morgan’s customers to blend renewable diesel with biodiesel and CARB diesel, a specific grade of diesel required by the California Air Resources Board (CARB). Finally, Kinder Morgan will modify storage and truck rack capacity at its Mission Valley Terminal to allow up to 5,000 bpd of renewable diesel throughput.
Kinder Morgan says that the new hub will be the first of its kind in the US, allowing customers to transport batches of renewable diesel by pipeline with no resulting loss of product to and thus avoid the loss of the Californian renewable tax credits, such as the Low Carbon Fuel Standard (LCFS). The company is also planning a northern Californian renewable diesel hub, and will invest more than US$50 million (€44 million) in distributing renewable fuels in California. Both the hubs are supported by long-term customer contracts, and are expected to be in service from Q1 2023.
‘We are pleased to be constructing these hub projects to expand our renewable diesel handling capabilities,’ says KMI’s president of products pipelines, Dax Sanders. ‘As refineries are converting to renewable diesel, we believe this is an attractive opportunity to pivot to the energy fuels of the future in a manner that is consistent with our corporate goals and return criteria.’
(Source: Tank Storage Magazine)