Kinder Morgan Inc has dropped out of a recently proposed U.S. Gulf Coast deepwater crude export venture, the project's leader Enbridge Inc said on Monday.
The $800 million project, known as Texas COLT, is one of eight similar projects proposing facilities that would move U.S. shale to overseas markets by loading supertankers able to carry up to 2 million barrels apiece.
Pipeline operators Enbridge and Kinder Morgan disclosed plans to build an crude export terminal off Freeport, Texas, in January, and filed permit applications with the U.S. Maritime Administration. German oil storage firm Oiltanking Partners remains committed to the project, said Enbridge.
"The project does not align with our strategic priorities," Kinder Morgan spokeswoman Lexey Long said. The company cited the time commitment to move the project through a regulatory phase and a recent internal review.
Enbridge said it will buy out Kinder Morgan's stake in the project, and expects the facility would still be well-positioned to "provide the supply diversity" that is attractive to overseas U.S. crude buyers, spokesman Michael Barnes said.
"Enbridge has interests in Gray Oak, Seaway and ETCO pipelines serving Houston crude markets," Barnes said.
Kinder Morgan's involvement in the joint venture provided access to the 300,000 barrel-per-day Kinder Morgan Crude and Condensate pipeline that runs from the Eagle Ford shale in South Texas to the Gulf Coast.
The proposed COLT project would load 23 supertankers per month at a rate of 85,000 barrels per hour. The vessels would be moored at an offshore platform almost 30 miles (48 km) off Texas, in 110 feet (33.5 m) of water, with oil supplied through a 42-inch (107 cm) pipeline, Enbridge said in regulatory documents. (Reporting by Collin Eaton in Houston Editing by Marguerita Choy)