UPDATE 2-Exxon refinery cuts rates after Montana oil spill

Tue Jul 5, 2011 3:39pm EDT

Related Topics

 * Exxon working to replace oil supply to Billings refinery
 * CHS Montana refinery partly supplied by Exxon pipe
 * Montana refineries supply niche market
 (Adds comment, detail from CHS)
 HOUSTON, July 5 (Reuters) - ExxonMobil Corp's (XOM.N)
60,000 barrel-per-day (bpd) Billings, Montana refinery cut back
production over the weekend after the company's Silvertip
pipeline spilled 1,000 barrels of crude into the Yellowstone
River north of Billings.
 The 40,000-bpd pipeline also partly supplies CHS Inc's
(CHSCP.O) 58,000-bpd refinery in Laurel, Montana, about 16
miles southwest of Billings. That plant was "operating
normally" on Tuesday as it receives most crude through its own
Front Range pipeline that stretches north into Canada,
spokeswoman Lani Jordan said.
 The Montana refineries are considered niche plants that
utilize local crude oil to supply a small market that is
physically isolated from major refining regions like those on
the West and Gulf coasts.
 A spokesman for ConocoPhillips' (COP.N) 58,000-bpd Billings
refinery said reports over the weekend that the refinery is
supplied by the Silvertip line were erroneous.
 "ConocoPhillips' operations in the Billings area have not
been impacted by the pipeline spill," said company spokesman
Rich Johnson. "We have provided some spill response equipment
and supplies and are on stand by to provide additional mutual
aid support if needed."
 The Silvertip pipe brings crude from oil fields in southern
Montana north to the Exxon and CHS refineries.
 ExxonMobil was working to arrange a replacement supply of
crude for the refinery, said spokesman Alan Jeffers.
 Jordan said CHS also was evaluating rail and trucking
options for bringing in crude normally received from the
Silvertip line.
 "Silvertip is not a big piece of our picture," she said.
"We do from time to time pull some barrels off the Silvertip."
(Reporting by Erwin Seba and Kristen Hays; Editing by Lisa
Shumaker and Sofina Mirza-Reid)

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