On Wednesday, Aug. 28, the National Energy Board (NEB) became the Canada Energy Regulator (CER). For further information please visit our Implementing the Canadian Energy Regulator Act information page

Pipeline Profiles: Kinder Morgan Cochin

Pipeline system and key points

Section updated June 2019

The Cochin Pipeline receives condensate from the Explorer, TEPPCO and Wabash pipelines at its Kankakee, Illinois, terminal and delivers it to Fort Saskatchewan, Alberta. At Fort Saskatchewan, the Cochin Pipeline connects with several terminals and pipelines that are used to store and deliver condensate to oil sands production sites in Alberta.

The Cochin Pipeline commenced operations in 1979. Cochin originally moved products (solely propane in recent years) eastward from Fort Saskatchewan to Windsor, Ontario. In March 2014, the direction of flow on the segment of the Cochin Pipeline from Kankakee, Illinois, to Fort Saskatchewan was reversed to transport condensate westbound. The reversed pipeline started operations in July 2014.

In May 2016, the Board granted leave for Kinder Morgan Cochin ULC to sell to Kinder Morgan Utopia ULC the Eastern Portion of the Cochin Pipeline in Canada from the international border near Detroit, Michigan, to Windsor, Ontario. In November 2017 the Governor in Council amended the authorization for the Cochin Pipeline reflecting removal of the Canadian Eastern Portion of the Cochin Pipeline.

The Eastern Portion of the Cochin Pipeline in Canada now operates as the Canadian portion of the Utopia Pipeline. The pipeline went into service in January 2018 delivering ethane from Harrison County, Ohio to Windsor, Ontario. The U.S. portion of the Utopia project consists of a new pipeline from a point in Harrison County, Ohio to a connection with existing Kinder Morgan pipeline and facilities near Riga, Michigan. The initial capacity of the Utopia Pipeline is 50 000 barrels per day (b/d), which is expandable to more than 75 000 b/d.

Cochin pipeline system map

Source: NEB

Text version of this map

This map provides an overview of the Cochin Pipeline.

Official NEB documents related to the construction, operation and maintenance of the Cochin Pipeline can be found here: Cochin pipeline regulatory documents [Folder 457425].

You can see Cochin Pipeline and all NEB-regulated pipelines on the Board’s Interactive Pipeline Map. The map shows more detailed location information, the products carried by each pipeline, the operating status and more. You can also view a map on Kinder Morgan’s website.

Throughput and capacity

Section updated quarterly (early March, mid-May, mid-August and mid-November)

Note: The physical capacity of a pipeline is based on many factors such as the direction of flow, ambient temperature, pipeline compression, and maintenance work or other pressure restrictions. The operational capacity at each key point may also reflect contracts for transportation service, and supply and demand across the system. The actual physical capacity of the pipeline may, at times, be higher than the assumed operational capacity stated here.

Open data can be freely used and shared by anyone for any purpose. The data for these graphs are available.

Tolls

Section updated June 2019

A toll is the price charged by a pipeline company for transportation and other services. Tolls allow pipeline companies to safely operate and maintain pipelines. Tolls also provide funds for companies to recover capital (the money used to build the pipeline), pay debts, and provide a return to investors. The interactive graph below shows tolls on key paths on the pipeline since 2014.

Open data can be freely used and shared by anyone for any purpose. The data for these graphs are available.

Cochin has been regulated on a complaint basis since 1986. Cochin provides condensate service to committed shippers from Kankakee County, Illinois; Clinton, Iowa; and Masback, North Dakota based on international joint tolls. Cochin reserves 10% of its capacity for uncommitted service with an uncommitted toll for local Canadian shipments and an international joint toll for shipments originating in the United States. Committed tolls vary according to the volume of condensate that a shipper commits to the Pipeline. Official NEB documents related to the traffic, tolls and tariffs for the Cochin Pipeline can be found here: [Folder 472901]

Abandonment funding

Section updated June 2019

The Board requires all pipelines to set aside funds to safely cease operation of a pipeline at the end of its useful life. In 2016, Kinder Morgan Cochin estimated it would cost approximately $28 million to do this. These funds will be collected from shippers over a period of 19.5 years and are being set aside in a trust.

Table 1: Kinder Morgan Cochin abandonment trust fund balance
  2015 2016 2017 2018
Trust fund balance ($) 1 681 892 3 191 760 4 983 000 6 860 000

Official NEB documents related to abandonment funding can be found here, sorted by year and by company: abandonment funding documents [Folder 3300366].

Pipeline financial information

Section updated June 2019

Pipeline companies report important financial information to the Board quarterly or annually. A strong financial position enables companies to maintain their pipeline systems, attract capital to build new infrastructure, and meet the market’s evolving needs. The data in this table comes from Cochin’s quarterly filings with the Board [Folder 472902].

Table 2: Cochin Pipeline financial data
  2010 2011 2012 2013 2014 2015 2016 2017 2018
Revenues (million $) 23 40 26 19 30 50 54 53 55
Rate base (million $) 84 81 76 74 107 146 155 161 157
Return on rate base (%) 5.75 5.75 5.75 5.75 5.75 8.25 8.25 8.25 8.25

Cochin 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. Since 2015 (the first full year of condensate service) it realized the maximum allowable return each year.

Corporate financial information

Section updated June 2019

The Cochin Pipeline is owned and operated by Kinder Morgan Cochin ULC, an indirect wholly owned subsidiary of Kinder Morgan Canada Limited (KML). Kinder Morgan, Inc. (“KMI”) owns a majority voting interest in KML.

Credit ratings provide an indication of the financial strength of a company, including its ability to attract capital to build new infrastructure and meet financial obligations. Kinder Morgan Cochin ULC was issued a rating of BBB(high) by DBRS as well as BBB by S&P, following closing of $5.5 billion in secured credit facilities to fund, in part, the Trans Mountain Expansion Project. Additionally, KML was rated by S&P at a rating of BBB. The credit facilities are guaranteed by KML, Kinder Morgan Canada Limited Partnership and other operating entities comprising KML’s business.

Table 3: TransCanada PipeLines Ltd. financial ratios and credit ratings
  2016 2017 2018 2019
Adjusted EBIT interest coverage ratio 2.9 3.6 6.3
Adjusted cash flow to total debt ratio (%) 19.9 58.5 27.4
DBRS credit rating Not rated BBB (high) BBB (high) BBB
S&P credit rating BBB BBB BBB BBB

Financial regulatory audits

Section updated June 2019

The Board audits pipeline companies to confirm compliance with the National Energy Board Act, regulations, Board orders and Board decisions. Financial regulatory audits focus on toll and tariff matters such as detecting cross-subsidies. Cochin’s last audit began in January 2019. Official NEB documents related to Cochin’s financial regulatory audits can be found here: [Folder 558655]

Condition Compliance

Section updated September 2018

Every pipeline company in Canada must meet federal, provincial or territorial, and local requirements. This includes Acts, Regulations, rules, bylaws, and zoning restrictions. Pipelines are also bound by technical, safety, and environmental standards along with company rules, protocols and management systems. In addition to these requirements, the Board may add conditions to regulatory instruments that each company must meet. Condition compliance is monitored by the Board and enforcement action is taken when required. For a detailed list of conditions that Cochin must meet, and their status, please see the condition compliance table and search for “Kinder Morgan Cochin ULC”.

Safety Performance

Section updated June 2019

The Board holds the companies it regulates accountable to protect the safety of Canadians and the environment. As part of this accountability, companies must report to the NEB events such as incidents and unauthorized third-party activities that happen without the pipeline company’s written consent. For a summary of pipeline incidents and unauthorized activities on the Cochin pipeline since 2008, visit the Safety performance dashboard and select “Kinder Morgan Cochin ULC”.

Emergency Management

Section updated June 2019

The NEB checks to make sure companies are keeping pipelines safe by doing inspections, in-depth safety audits, and other activities. Yet, even with these precautions, an emergency could still happen. Sound emergency management practices improve public safety and environmental protection outcomes, and provide for more effective emergency response.

The NEB holds its regulated companies responsible for anticipating, preventing, mitigating, and managing incidents of any size or duration. Each company must have an emergency management program that includes detailed emergency procedures manuals to guide its response in an emergency situation. We oversee the emergency management program of a regulated company’s projects as long as they operate.

The Board requires companies to publish information on their emergency management program and their emergency procedures manuals on their websites so Canadians can access emergency management information. To view Cochin’s emergency response information, see the company’s Spill Response Plan.

 

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