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Kinder Morgan (KMI) Notifies California Diesel Hubs' Operation

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Kinder Morgan (KMI - Free Report) recently revealed that its renewable diesel (RD) hub projects in Southern and Northern California has officially entered full commercial operation. With the use of RD, diesel-powered vehicles, railroads and other machinery can run with considerably lower life-cycle emissions.

The company’s RD hubs are the most effective and least carbon intensive way to transport this low-emission fuel from the Los Angeles refinery region to San Diego and the Inland Empire, and from the San Francisco Bay area to Sacramento, San Jose, and Fresno. Both hubs’ initial phases are fully subscribed with customer commitments.

According to Dax Sanders, president of products pipelines at KMI, pipelines continue to be the safest and most cost-efficient mode of long-haul transportation for liquid fuels. He added that these projects offer a significant opportunity to switch to low-emission future energy sources while still supplying fuels that are in demand today.

Since the beginning of February 2023, the Southern California hub, which provides a throughput of up to 20,000 barrels per day (bpd) of mixed diesel across the two inland destination truck racks, has been supplying RD to San Diego. Recently, deliveries to Colton have also commenced.

The Southern California hub links maritime RD supplies entering the Ports of Los Angeles and Long Beach to the Los Angeles market via the truck rack at SFPP's Carson Terminal and to KMI's SFPP pipeline system for delivery to the Inland Empire and San Diego regions.

The Northern California hub, which transports RD (via the SFPP northern pipeline system at a throughput of 21,000 bpd) from the San Francisco Bay region to KMI's Bradshaw, Fresno, and San Jose terminals, is now commencing supply of RD to those markets. KMI made use of existing infrastructure for its Northern California hub, with potential capacity expansions in forthcoming phases.

Zacks Rank & Key Picks

Kinder Morgan currently holds a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Some better-ranked stocks for investors interested in the energy sector are CVR Energy (CVI - Free Report) , Par Pacific Holdings Inc. (PARR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) and Valero Energy Corporation (VLO - Free Report) carrying a Zacks Rank #2 (Buy).

CVR Energy, a diversified holding company with its main office in Sugar Land, TX, is an independent refiner and marketer of high value transportation fuels. Over the past seven days, CVI has seen an upward revision in earnings estimates for 2023.

Par Pacific, a growth-oriented company, combines knowledge of corporate financing with experience in the oil and gas sector. With 94,000 barrels per day of active refining capacity and a logistical system that includes an SPM, storage, barges, pipelines and trucking operations, PARR owns and manages one of Hawaii's biggest energy networks. Over the past 30 days, the company has witnessed an upward revision in earnings estimates for 2023 and 2024.

Valero Energy is a global manufacturer and marketer of transportation fuels and petrochemical products. With 15 refineries spread across Canada, the United States and the United Kingdom, it has a daily refining capacity of 3.1 million barrels. Over the past seven days, VLO has seen an upward revision in earnings estimates for 2023.

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