HOUSTON (Reuters) - Kinder Morgan Inc's (KMI.N) proposed Freedom Pipeline, which would move West Texas crude oil to Southern California, is "getting more interest" from U.S. West Coast refiners, the head of the company's natural gas pipeline unit told analysts on Wednesday.
Unit President Tom Martin said the company "may have a shot" at moving ahead with converting a natural gas pipeline to move crude and condensate to California "if we can get the refiners on board."
The pipeline and logistics company first proposed the $2 billion project in 2012 but shelved it in May 2013 for lack of shipper interest. Martin said on Wednesday that the revamped proposal included adding a facility at the front end in Texas to provide crude blends that better match the Alaska North Slope (ANS) crude that California refineries typically process.
The new proposal also involves shipping ultra-light crude, known as condensate, that could be exported from California, he said during the company's annual analyst meeting.
Martin did not say whether Kinder Morgan has or is awaiting U.S. government approval to export condensate with enough processing to qualify as an exportable refined product.
At least four other companies have received such approvals, and a fifth is moving ahead with exports without a ruling, satisfied that its minimal processing is sufficient.
If approved, the Freedom Pipeline project would open another outlet for processed condensate exports that so far have been shipped from the U.S. Gulf Coast.
In 2013, Kinder Morgan said the project could be revived if shipper interest warranted. Martin said the original proposal to convert the 740-mile (1,190-km) line to move crude and build more than 200 miles (320 km) of new pipe would have moved West Texas oil that did not match the types that West Coast refiners want.
The new proposal includes a topping unit in Wink, Texas, that would produce processed condensate as well as gasoils and residual fuels to create ANS-like crude blends.
"It seems to be getting more interest from the refiners in the West," Martin said.
Reporting by Kristen Hays; Editing by Lisa Von Ahn and Jonathan Oatis