Canada’s Pipeline Transportation System 2016

Kinder Morgan Cochin ULC’s Cochin Pipeline

Table 8.5.1: Kinder Morgan Cochin ULC’s Cochin Pipeline
Commodity and NEB Group Condensate (Western Portion)
Propane – Ethane Mix (Eastern Portion)
(Group 1)
Operating capacity 15 100 m³/d
(95 Mb/d)
Average utilization 2015 84%
Primary receipt points Kankakee County, IL (Condensate)
Fulton County, OH (Ethane-Propane Mix)
Points de livraison principaux Ft. Saskatchewan, AB (Western Portion)
Windsor, ON (Eastern Portion)
Rate base 2015 $146.10 million
Revenue 2015 $49.65 million
Abandonment Cost Estimate and Collection PeriodNote a $26.3 million;
19.5 years

Overview

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 Ft. 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, ON, but no flows were reported in 2015.

Key Developments

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.

Utilization

Figure 8.5.1 illustrates throughput and capacity on Cochin. Current capacity is 15 100 m³/d (95 Mb/d). Throughput from July to December 2014 averaged 9 000 m³/d (57 Mb/d) and in 2015 averaged 12 700 m³/d (80 Mb/d).

Figure 8.5.1: Cochin Throughput vs. Capacity

Figure 8.5.1: Cochin Throughput vs. Capacity

Sources: Kinder Morgan, NEB

Text version of this graphic

This bar chart shows throughput and capacity for the Cochin Pipeline over the 2010-2015 period. Capacity in 2015 was 15.1 10³m³/d (95 Mb/d). Throughput averaged 12.7 10³m³/d (80 Mb/d) in 2015, compared to 9 10³m³/d (57 Mb/d) from July - December 2014.

Tolls

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

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 8.5.2: 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%
Photos: left: A pump jack silhouetted against the setting sun; centre: The grey valves and wheels of a pump station on clear day; right: Folded hands hold a pen on a board room table in a large meeting room.

 

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