PBF completes expansion of crude rail terminal at Delaware City refinery


PBF Energy completed an expansion of a rail terminal allowing its Delaware City, Del., refinery to take in more crude oil from Canada and from North Dakota's Bakken formation.

The completion of the facility brings the amount of crude that can be offloaded at the refinery to 110,000 bpd -- 40,000 bbl of heavy Canadian crude oil, and 70,000 bbl of light crude. When the project was announced last year, PBF said it was bringing in 20,000 bbl of Bakken and Canadian crude by rail.

Trains carrying Bakken oil are expected to begin arriving at PBF's 182,200 bpd refinery this week.

Tom Nimbley, PBF Energy's chief executive, said in a statement that the expanded rail facility puts PBF at a competitive advantage compared to other East Coast refineries.

"PBF is now able to deliver significant quantities of cost-advantaged North American crude oils directly to Delaware City at very competitive pricing," he said.

East Coast refineries have traditionally imported crude oil tied to Brent prices, which are substantially higher than oil from the Bakken even after shipping costs. That price difference has revived the fortunes of refiners in a region where last year numerous refineries were expected to shut down because of the high cost of imported oil.

But pipeline construction has focused on bringing Canadian and Bakken crude south to the US Gulf Coast, leaving East Coast refineries dependant on rail for delivery.

Last month, Phillips 66 said it signed a five-year contract for rail delivery of 50,000 bpd of North Dakota crude to its New Jersey refinery. Delta Air Lines said last month that its Trainer, Pa. refinery will take a "test run" delivery of Bakken crude this quarter and is evaluating more long term crude sourcing options from the region.

PBF also said Monday that it will spend $50 million increase the capacity of the heavy-crude rail unloading facility to 80,000 bpd by the fourth quarter of this year -- double the current capacity.

It will move that heavy crude in its own rail cars. The company announced that it has entered into agreements for 2,000 more of the coiled and insulated rail cars used to transport heavy crude oil, up from 1,600 cars it currently owns or leases.

The company also announced agreements for 500 general-purpose rail cars.

Dow Jones Newswires

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