Kinder Morgan Energy Partners LP’s (KMP) Trans Mountain oil pipeline (TMPL) is overbooked by a wide margin for September. This has forced the company to cut shipper nominations. The pipeline carries oil to Canada’s Pacific Coast from Alberta.
Due to volume compression, the company will only be able to move 32% of the allocated volume on the 300,000 barrel per day (bpd) capacity pipeline system. According to the company, this translates into 270,045 bpd for the month.
Kinder Morgan has a total oversubscription of 62% for the overall system. The overall system includes the Trans Mountain pipeline, Puget Soundline and Westridge Dock.
The Puget Sound pipeline system, which ships Canadian crude oil and condensates via the TMPL system, will see an 8% reduction in its nominations. Westridge Dock, situated in Burnaby, British Columbia transports oil and refined products to California, the U.S. Gulf Coast and overseas, does not have any allotment for regular shipments.
In North America, TMPL is the sole pipeline system that transfers both crude oil and refined products to the west coast. Notably, TMPL carries products from Edmonton, Alberta, to marketing terminals and refineries in the central British Columbia region, the Greater Vancouver area and the Puget Sound area in Washington State.
Kinder Morgan has a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. For the long term, we maintain a Neutral rating on the stock. Enterprise Products Partners LP (EPD) and Energy Transfer Partners LP (ETP) are major competitors of the company.
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