Tesoro replacing ANS crude with Bakken

Tesoro Corp. plans to replace some Alaska North Slope crude oil with oil from North Dakota shale at one of its West Coast refineries, the company announced recently.

Tesoro said it plans to ship 30,000 barrels per day from the Bakken Shale in North Dakota’s Williston basin to its oil refinery in Anacortes, Wash., through a new rail project.

The company said that Bakken crude oil yields approximately 16 percent more clean product and less fuel oil than Alaska North Slope crude, and that during the second quarter, the differential between those products was approximately $28 per barrel.

Oil from source rock is cleaner than oil from conventional reservoirs because in a conventional reservoir the oil picks up impurities as it migrates from the source rock.

The $50 million project will include loading and unloading facilities and dedicated rail cars at the Anacortes refinery. It is expected to take nine to 12 months to complete.

Tesoro reported refining throughput from its Alaska and Washington facilities of 168,000 barrels per day during the second quarter, up from 84,000 bpd in the second quarter of 2010, and a gross refining margin of $220 million, up from $98 million last year.

(The company does not break out figures by state or by specific facility.)

—Eric Lidji