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Expansion of fuel pipeline is approved

July 20, 2007|From Bloomberg News

Kinder Morgan Energy Partners, the second-largest publicly traded pipeline partnership, won federal approval Thursday for a rate plan it sought to fund a $400-million expansion of its California-to-Las Vegas fuel pipeline.

The Federal Energy Regulatory Commission, meeting in Washington, approved Kinder Morgan's rate-plan request for the 550-mile Calnev pipeline, which ships gasoline, diesel and jet fuel from Colton. The company plans to build a 16-inch diameter pipeline to increase capacity on the system by 43,000 barrels a day, to 186,000 barrels.

"This project is vital to the economy of southern Nevada," Commissioner Jon Wellinghoff said in a statement released during the meeting.

Houston-based Kinder Morgan Energy could have the expanded pipeline operating by late 2009 or early 2010. Its bid to increase capacity on the system is supported by several state officials and members of Congress.

Several companies that use the existing pipeline, including Exxon Mobil Corp., ConocoPhillips, Valero Energy Corp. and BP, protested the rate plan, claiming it would put the entire financial risk on them, the shippers, and allow the partnership to charge unreasonable rates.

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