PSX To Build New CBR Terminal In The Bakken; Location Not In This Story -- September 4, 2014

Updates

November 21, 2014: update on the Sacajawea Pipeline and Palermo Rail Terminal. To be on-line in first quarter 2016. 

September 5, 2014: see first comment. Looks like this may be at Palermo, ND, about 10 miles east of Stanley, ND, one of the hottest areas in North Dakota. Palermo was mentioned in this posting last year.
 

Original Post

I track CBR terminals here. To the best of my knowledge this PSX announcement is separate from the just-announced Plaza CBR terminal.

Argus Media is reporting:

Phillips 66 will build a rail-loading facility permitted to handle up to 200,000 b/d of Bakken crude, the first time a US refiner has directly owned a North Dakota origination terminal. The company will also buy 500 rail cars, bringing its total fleet to 3,700.

"We have permits in hand in engineering to construct a new rail-loading facility. This is permitted up to 200,000 b/d. We'll probably do about 160,000 b/d" and build about 300,000 bl in storage.

Refiners like Tesoro, Phillips 66 and PBF Energy have been keen to source crude by rail but so far largely invested in refinery-side or destination unloading facilities while taking out capacity, without owning or building the facilities, on the origination side. Producers like EOG Resources and Hess have invested in terminals on the origination or oilfield side.

Phillips 66 is working to bring more advantaged crudes to its refineries and invest more in shale crude logistics, including dropping midstream assets into a master limited partnership (MLP). It is adding another Jones Act vessel for a total of three in its fleet in January, and looking to bring more advantaged crudes to its 250,000 b/d Alliance refinery in Belle Chasse, Louisiana.

The company last year took order of 2,000 new railcars and put in an additional order of 1,200 general purpose rail tanker cars for receipt from summer of 2014 through early 2015 for a total rail-owned fleet capacity of 160,000 b/d.

Phillips 66 unloaded its first unit train on 5 August at its new 70,000 b/d crude-by-rail facility at its 250,000 b/d Bayway refinery in New Jersey. It also has capacity to take 50,000-75,000 b/d from a Global Partners facility, and can also receive crude from the Texas Gulf coast via its two Jones Act vessels.

Garland also sees "a lot of opportunity" around condensate-related infrastructure, including gathering, splitting and dock facilities. "More to come on that in the future," he said.

A 30,000 b/d rail unloading facility at the company's 96,000 b/d refinery in Ferndale, Washington, will be online in the fourth quarter.

With all the environmental activism in the Pacific Northwest I was surprised to see that last line, Ferndale, Washington. I think I posted the story some time ago, but have long forgotten.

And then the very next line in the story:

"We're disappointed" in the slow permitting process for the company's planned 40,000 b/d Santa Maria rail unloading facility, which would serve the company's San Francisco refining complex, but "it just takes time in California to get things permitted," Garland said. The company has also contracted for 20,000 b/d of capacity out of Plains All American Pipeline's upcoming rail terminal in Bakersfield, California.

It is counter-intuitive but that's good news for the Bakken that the company is having problems in California. The dollars that can't be spent in California will be spent elsewhere until California gets the permitting process completed.