One Little Story WIth So Many Story Lines -- Including A Bakken Tie-In -- June 19, 2015

This is another minor story in the big scheme of things, but lots of story lines, for starters:

• despite gloom and doom in the energy sector, a lot of "stuff" is still going on
• a lot of that "stuff" is opportunity for some clever/smart CEOs
• the US may not be able to export crude oil, but the US can export refined products

A reader sent me this link. See if you can spot the Bakken connection. Argus Media is reporting:

PBF Energy will buy ExxonMobil and PdV's joint venture 189,000 b/d refinery in Chalmette, Louisiana, a deal that gives the US independent refiner greater access to lucrative export markets.

The $322mn plus working capital deal includes the refinery and associated pipeline and terminal assets. PBF Energy will have access to LOOP and 80 percent ownership of the Collins Pipeline Company and T&M Terminal company, which offer access to the massive Colonial produces pipeline system in Collins, Mississippi.

Note the word "massive." Not often used in "straight" news stories.

LOOP?  Regular readers know. Newbies can start here. 

Wow, the story lines abound in this one linked story, again:

• the Bakken connection
• CBR may be more expensive but it is more flexible than pipeline
• the Bakken affects the way some CEOs are making decisions
• consolidation in the oil and gas industry; big companies getting bigger

Continuing:

[PBF's CEO] O'Malley had long lamented the size and range of PBF Energy's refining capacity. The refiner commands the US Atlantic coast's only coking capacity and one of the largest on-site rail facilities in the region, increasing the crude flexibility of its system.

But that flexibility depends on sufficient discounts between western Canada and the US midcontinent to the US Atlantic coast to cover rail shipping prices, a costly delivery method. Rail arbitrage for Bakken, a favored domestic crude for PBF, was closed for a third of the first quarter this year.

PBF looked for refining assets in the midcontinent, in the challenging California refining sector and at Citgo facilities on the US Gulf coast as the company tried to break out of the Atlantic.

"If it's in the United States, we want to look at it," O'Malley told reporters in November.

As if that were not enough, two more pearls for story story lines:

• how California regulators are affecting the California oil and gas industry
• Venezuela's state-owned oil and natural gas company desperately needs cash (can you say $50 OPEC oil which Saudi Arabia likes)? 

Continuing:

The opportunity (to buy in California) appeared to fade with PdV's decision late last year to not sell its US refining subsidiary, Citgo.

PBF cooled bullish talk on operating in California, where regulators have made operating steadily tougher for refiners, around the same time.

 A lot of story lines in that article; lots of swirling tea leaves. I particularly liked:

• the Bakken connection; the CBR story
• Venezuela's state-owned oil company in desperate need of cash
• the effect California regulators are having on its own state's ability to sustain normal operations