Moving to New Markets

By The Bakken magazine staff | May 24, 2013

The movement of Bakken-crude out of the region is beginning to happen in a big way. Two major oil refining firms, Tesoro Corp. and Phillips 66 have signed agreements to ship Bakken crude to refineries on the east and west coasts. And, PBF Energy Inc., an independent refiner operating on the East Coast, has signed with Continental Resources Inc. to move a portion of CRI’s crude to a Delaware refinery.

Dennis Nuss, spokesperson for Phillips 66, says the company plans to use Bakken crude in its Bayway, N.J., refinery and in its Ferndale, Wash., refinery. And, Nuss refers to Bakken crude as advantaged crude, or oil that sells at a discount to the global benchmark, North Sea Brent crude. For Phillips 66, the main challenges of working with Bakken producers is the long supply chain between N.D. and coastal refineries, a situation that makes scheduling and tracking railcars difficult. But, he says, “We are confident we can overcome this challenge.”

So are other companies. Tesoro Corp. and Savage Companies, have formed a joint venture to bring Bakken crude to the Port of Vancouver where product will end up at a new 120,000-barrel-per-day crude rail-unloading and marine-loading facility.  Savage will design, construct and operate the facility, which could be operational in 2014. Tesoro is already planning an expansion to 280,000 bpd. The Port of Vancouver team looks forward to diversifying its cargo handling capabilities, according to Todd Coleman, CEO.

PBF also has a lot to look forward to. Through its agreement with CRI, the company will use its double-loop track to receive Bakken crude. Tom Nimbley, PBF CEO, said of the agreement, the company has made significant investments in acquiring rail cars and developing its East Coast rail delivery infrastructure,  which “positions PBF to benefit from these cost-advantaged crudes.”