Tuesday, December 3, 2013

Phillips 66 Plans California Rail Transload Project

Phillips 66 reportedly plans to build a rail transloading facility at its Santa Maria refinery in California's San Luis Obispo County that would accommodate up to 250 crude shipments per year. According to the company's environmental impact statement, the most likely source of crude for the rail terminal would be North Dakota's Bakken Field. The transloading project would consist of five sets of parallel tracks and would be connected to Union Pacific's coastal line that runs from downtown Los Angeles north to the Bay Area. The project's sixty day public comment period began in mid-November. 

Meanwhile, a similar facility proposed by Valero Energy Corp for its refinery at Benicia in northern California reportedly has been delayed for more than a year to allow time for an environmental assessment to be completed. The $30 million dollar project, which was announced in March, would be designed to offload up to 70,000 bpd, primarily from the Bakken play, at the 132,000 barrels per day refinery.

Valero's California refineries reportedly have the highest operating expense per barrel and the lowest operating income per barrel of the company's 16 oil refineries. The company announced plans in 2012 to sell the Benicia refinery as well as its 78,000 barrels-a-day Wilmington refinery outside Los Angeles. The offer attracted little interest and the company instead decided to upgrade the refineries to allow them to take in inexpensive domestic crude by rail. Valero announced in August that it had begun delivering crude via rail to its Canadian refinery in Quebec City.

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