What is LP situation?

New tank installed K&H Energy Cooperative installed a new LP tank on the west edge of Lime Springs, at the former Thermogas plant. It was placed on Sept. 11 and is being hooked up this week. At 85 percent it holds about 25,500 gallons. The Cochin pipeline in Minnesota and New Hampton is closing, and the second tank will ensure customers have a reliable supply of propane. The cost is approximately $100,000 per tank to install said Jeff Burnikel, Sales and Service Tech.

New tank installed
K&H Energy Cooperative installed a new LP tank on the west edge of Lime Springs, at the former Thermogas plant. It was placed on Sept. 11 and is being hooked up this week. At 85 percent it holds about 25,500 gallons.
The Cochin pipeline in Minnesota and New Hampton is closing, and the second tank will ensure customers have a reliable supply of propane. The cost is approximately $100,000 per tank to install said Jeff Burnikel, Sales and Service Tech.

By Marcie Klomp
How many remember the LP shortage last winter? Prices got up to near $5.00 per gallon for some, $3.50 more than their neighbors who contracted.

K&H Energy is trying to make sure that doesn’t happen again by adding storage in Lime Springs and three other locations (Lakota and Corwith, Iowa and Harmony, Minn.), along with getting LP by rail and truck.

Other companies are also trying to make different accommodations for getting LP. In March 2014, the main LP pipeline (Cochin, which brought LP from Alberta, Canada) for this area was closed at New Hampton. All the other product in the Midwest gets pumped out of Clear Lake, Iowa or Sanborn/Vernon Center, Minn.

The reason for closing the Cochin line is simple—money. The line was only used to about 30 percent capacity. It was convenient for northeast Iowa, but not profitable for the pipeline. Now the line will carry condensate.

Condensate is a type of ultralight oil. When underground, condensate is mostly a gas, but it condenses into a liquid when pumped to the surface.

The condensate is traveling from the Chicago area to the oil fields of North Dakota and is used in some way with fracking. This will allow the Cochin Pipeline to be used at 100 percent capacity.

There is a 10-year contract for the pipeline. That means no LP will be coming from New Hampton.

Eldon Meyers, Operations Manager of K&H, said, “Most companies are trying to plan for putting new storage.” Besides the new tanks in Iowa and Minnesota, he said the company is contracting LP by rail from Wisconsin and some by truck out of Missouri.

Local companies are trying to anticipate the needs of their customers this winter and are taking precautions to help get them through the cold months ahead.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s