“Now it’s about finding the best market for crude, whether it’s heavy crudes or light, and matching that with the appropriate market,” says Mark L. Reichman, an analyst for Simmons & Co. International. Some refineries were built to process heavy, high-sulfur (or sour) crude, while others were engineered to run light, low-sulfur (sweet) crude. Switching a refinery from one to the other isn’t economic. However, there is a growing use of crude blending to create medium-grade crudes that can be processed economically.
Kinder Morgan will partially address the abundance of light, sweet crude arriving at refineries tooled for heavier stock. It is constructing splitters that will separate liquids into several different components.
“They’ll split the material up into…better blend stocks and intermediate stocks for the refineries,” says Don Lindley, Kinder Morgan Energy Partners’ president of natural gas liquids business development. “You kind of chop the light ends of the crude off so that the rest of the barrel fits in better for the refineries.”
The KMCC pipeline will deliver some product to the splitters. Lindley says he’s not aware of any other company that is using the process to address the mismatch between Gulf Coast light crude and refiners’ heavy and sour requirements. BP is taking all the capacity on the splitters, which will have associated tank storage of 1.9 million barrels.
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