Kinder Morgan scraps Texas-Calif. pipeline

HOUSTON, June 3 (UPI) -- U.S. pipeline company Kinder Morgan said there wasn't enough interest from potential shippers to build an oil pipeline from Texas to California.

Kinder Morgan had proposed a $2 billion pipeline that would've moved as much as 277,000 barrels of crude oil per day from the Permian Basin in Texas to California.

Regional pipelines President Mark Kissel was quoted by the Houston Chronicle as saying there wasn't enough shipper interest to move forward, however.

"At Kinder Morgan, we don't believe in the concept of: Build it and they will come," he said. "We stated at the outset that we would not move forward with the project without customer support, and we did not receive enough interest for us to commit to building the project at this time."

Kissel said it was shifting its focus of delivery operations from Texas to railway rather than pipeline for the short term.

The Association of American Railroads reported last week carloads of oil delivered during the first quarter of 2013 were more than 160 percent higher than the same time last year.

Kinder said in February it plans to build a crude oil rail project for the Houston area. The project would allow partner company Mercuria Energy Trading to receive crude oil from the Bakken shale area in the northern U.S. Plains and from western Canada.