Moving crude around the Lower 48 by barge is not that uncommon, until it comes to the Pacific Coast.
But Kirby Corp., which owns the largest tank barge fleet in the United States, is examining the possibility of delivering Bakken crude to California once the crude reaches Anacortes, Wash., by rail.
Kirby President Greg Binion said preliminary investigations suggest that arrangement might be economic, starting at 80,000 barrels per day and building to 150,000 bpd.
He also said there might be interest in moving volumes of 330,000 barrels — a quantity that would surpass capacity of Kirby’s barges.
Steve Holcomb, Kirby’s vice president of investor relations, said innovative means of shipping Bakken crude to California are needed because there are no immediate plans for pipelines to the West Coast or to Baton Rouge, La.
He said Kirby expects that crude will be coming out of Washington State, Albany and St. Louis, originating from unit trains out of the Bakken.
irby is already using the rail-barge system to deliver Bakken crude from Albany, N.Y., to New York harbor, then to refineries near Philadelphia that are eager to source alternatives to Brent-priced crude.
Kirby Chief Executive Officer Joseph Pyne said he is counting on that arrangement expanding as East Coast refineries trade imported crude for domestic barrels.
Kirby has been active in carrying crude from Eagle Ford in south Texas to refineries near New Orleans, and crude from the Bakken via St. Louis and along the Mississippi River to Baton Rouge refineries.
The company reported that its crude shipments kept its inland barges operating at up to 95 percent utilization in the third quarter and boosted term and spot prices.
Over the first nine months of 2012, Kirby has added 34 net new tank barges, raising capacity by 671,000 net barrels, expanding its core business to 853 barges and capacity of 16.9 million barrels.
More vessels could be acquired from Overseas Shipholding, which has indicated it might file for bankruptcy protection, although there are legal and legislative problems to overcome.
—Gary Park
