Tesoro ups export optionsBakken gets more West Coast, northern outlets; oil barged to Alaska refinery Mike Ellerd For Petroleum News Bakken
Tesoro Logistics said May 6 that it is reversing a key section of its High Plains pipeline in northwest North Dakota in order to transport crude oil north from the Johnsons Corner area in northwest McKenzie County to access some of the attractive rail and pipeline export hubs in Williams and Burke counties. In addition, parent company Tesoro Corp. announced plans in late April for a new rail offloading and marine loading terminal on the Columbia River at Vancouver, Wash., which will provide additional options for Bakken crude along the entire West Coast.
Tesoro Logistics’ High Plains pipeline has historically run south from its connection with Enbridge at Portal on the Canadian border in northern Burke County across Lake Sakakawea to Johnsons Corner where it turns southeast and extends to the Tesoro refinery at Mandan. The system also has a loop that spurs from the trunk line between Johnsons Corner and Mandan and runs southwest through Fryberg, then up through Alexander and back into the trunk line north of Johnsons Corner. There is also a lateral that extends as far west as Richey in Dawson County in eastern Montana. That High Plains loop has connections to Bridger, Belle Fourche and Little Missouri pipelines.
By reversing the segment of the High Plains pipeline from Johnsons Corner north across Lake Sakakawea, Tesoro Logistics’ will provide access to a number of crude oil export hubs, including Global Energy’s Basin Transload rail facility at Columbus near the Canadian border in northern Burke County, which is served by the Canadian Pacific, and Inergy Midstream’s COLT rail loading facility at Epping in Williams County, which is served by Burlington Northern Santa Fe. High Plains accesses the COLT terminal via the 21-mile COLT Connector bidirectional pipeline that runs from the Dry Fork terminal at the Beaver Lodge/Ramberg pipeline hub south of Tioga where the connector pipeline also ties into the Enbridge pipeline system.
50,000-70,000 bpd The northbound High Plains reversal throughput is expected to be 50,000 to 70,000 barrels per day. The total cost of the project is estimated at $30 million, $20 million of which will be spent in 2013 with the project expected to be fully completed by mid-2014. However, Tesoro Logistics has already begun shipping small volumes of crude oil from the south side of Lake Sakakawea to the north side. Those volumes are expected to increase throughout the year.
As Petroleum News Bakken reported in late March, Tesoro Logistics and Global Partners are constructing a new seven mile crude oil pipeline that connects High Plains pipeline’s Lignite station to Global Partners’ Basin Transload facility at Columbus. That pipeline is expected to go into service in the third quarter of 2013. That additional throughput, coupled with the throughput from the High Plains reversal from Johnsons Corner, is expected to total 100,000 barrels per day.
Tesoro Logistics also announced plans on May 6 to construct a new crude oil storage facility near Tioga. Plans are to connect that facility to Enbridge’s transport system as well as the Global and Inergy terminals. Details on that storage facility were not released.
New Vancouver terminal Tesoro Corp., the parent company of Tesoro Logistics, announced plans in April to form a joint venture with Savage Cos., an energy supply chain management firm, to develop and operate a new 120,000 bpd crude oil unit train unloading and marine loading terminal at the Port of Vancouver on the Columbia River in southwest Washington state. Tesoro said the facility will be designed with a near-term expansion capability up to 280,000 bpd.
Although subject to regulatory approval, Tesoro expects the new Vancouver facility, estimated to cost between $75 million and $100 million, to be operational in 2014, providing another direct West Coast destination for Bakken crude oil. Tesoro has a refinery at Anacortes in northwest Washington where it has already been railing in and refining Bakken crude oil.
“This project builds on the recent success at our Anacortes refinery, where we were the first refiner to bring Bakken crude oil to the region via unit train,” said Tesoro President and Chief Executive Officer Gregory Goff in a May 2 conference call. “This project is equally as exciting because the Port of Vancouver is the most direct and cost-effective coastal outlet for Bakken crude oil from North Dakota, with a rail tariff lower than to Anacortes.”
Access to West Coast refineries The Vancouver terminal offers options to get Bakken crude oil to any of Tesoro’s West Coast refineries, including two in California. Goff added that the price to ship Bakken crude oil to the company’s Anacortes refinery is $9.75 per barrel. The cost to Vancouver will actually be less, and an additional $2 to $4 per barrel would get the crude oil to California. Goff said Tesoro has already ordered additional rail cars as part of its rail strategy and expects to take delivery of the cars, which will be coiled and insulated, in mid-2014.
In addition, during a recent turnaround at the Anacortes refinery, Tesoro actually barged some Bakken crude oil to its Alaska refinery.
“In the quarter, we did actually take advantage to do a brief test run of Bakken actually in Alaska, while Anacortes was in turnaround in the month of March,” Goff said. “And it actually came out with a relative refinery value, probably at that time, closer to the $4 to $5 a barrel advantage up in Alaska.”
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