Andeavor To Invest $150 Million In Belfield, North Dakota, NGL Logistics Hub -- Gathering, Processing, Transporting -- February 19, 2018

Updates

Later, 11:59 a.m. Central Time: speaking of Andeavor, this short note from Reuters via Twitter:

Independent refiner Andeavor said on Friday it plans to run its 10 U.S. refineries up to 96 percent of their combined capacity of 1.1 million barrels per day (bpd) in the first quarter of 2018.

The company also said during a conference call with Wall Street analysts that its refineries ran at 97 percent of their combined crude oil throughput capacity in the fourth quarter of 2017. For all of 2017, the refineries operated at 95 percent of combined throughput.

The company has a heavy overhaul schedule for 2018; in the final stages of completing a turnaround at Los Angeles that was started some time ago; doing a turnaroudn at Martinez.

Andeavor is integrating refineries into a single plant in Carson and Wilmington, California, adjacent industrial suburbs of Los Angeles
The 269,200 bpd Carson refinery and the 94,900 bpd Wilmington refinery adjoin each other.

Original Post 

A reader alerted me to this story with a comment at an earlier post, and just minutes ago, another reader sent me the link. Huge story -- thank you to those noting it and letting me know.

From a news release from Andeavor Logistics:

North Dakota NGL Logistics Hub. Andeavor Logistics today (February 16, 2018) announced its intent to build and operate the North Dakota Logistics Hub to further participate in the natural gas liquids (NGL) value chain and provide logistics solutions for increasing Bakken NGL production.

The project will convert a segment of the Andeavor Bakkenlink crude oil pipeline into NGL service to enable the movement of mixed NGLs from a new third-party gas processing facility in central McKenzie County, North Dakota to a newly expanded fractionation complex at the Andeavor Logistics Belfield processing facility. [Comment: there's a lot packed into that once sentence.]

From the fractionation complex, products will be shipped to the nearby Andeavor Fryburg rail terminal for manifest and unit train rail movements and will be consumed within Andeavor's refineries as well as marketed, including international markets, by Andeavor.

Project volumes are supported by a long-term gas processing facility dedication and minimum volume commitment. The estimated capital investment is expected to be $140 to $150 million and partial commercial operations are estimated to begin in late 2018, with full operations commencing in the first quarter of 2019.

The project is expected to deliver annual net earnings of $15 to $19 million and $22 to $26 million of annual EBITDA, representing a 6 to 7 times multiple.

Andeavor was previously known at Tesoro, a company based in San Antonio, TX. I'm having trouble getting used to the name change.  

Comments:

• this supports my thesis that companies like Andeavor aren't spending 100's of millions of dollars in the Bakken if they thought it was a dying field. I think there is more to the Bakken than most folks realize
• this is another advantage of a relatively small geographic footprint: the Bakken may extend well into Canada, and a ways into Montana and South Dakota, but for the most part, the center of activity is in a very small geographic area; we're not talking a 100-mile pipeline to connect a lot of these new projects, something that would be required in the Permian, as just one example
• it's great to see all that CBR (crude-by-rail) being re-engineered to CPBR (crude products by rail); I think a lot of folks, including me, were anxious about that excess capacity being wasted (I'll still refer to it as CBR, for now)
• the other nice thing about this project: it's down in the southwest part of the state, taking some pressure off the Killdeer-Watford City- Williston axis