UPDATE 1-Genesis to increase crude for Exxon Baton Rouge plant

Mon Feb 4, 2013 1:04pm EST

Related Topics

* New infrastructure to make more inland US crude available

* Exxon's Baton Rouge refinery and others could tap into it

* Pipeline, tankage at end 2014, rail offloading 2Q 2014

By Kristen Hays

HOUSTON, Feb 4 (Reuters) - Genesis Energy LP will build a new crude oil pipeline and a rail offloading facility plus expand tankage alongside the Mississippi River all to give Exxon Mobil Corp's Louisiana refinery more access to low-priced inland crudes, the company said on Monday.

The Houston-based company said it would spend $125 million to nearly double capacity at its Port Hudson, Louisiana, terminal to 416,000 barrels and build a new 18-mile (29 km) pipeline to move crude south from there to a tank farm at Exxon's 502,500 barrels-per-day (bpd) Baton Rouge refinery.

Genesis said it would build the rail offloading facility at Exxon's Maryland terminal between Port Hudson and Baton Rouge where the pipeline will pass through. Exxon will lease property at the Maryland terminal for the new offloading facility.

"This strategic project will increase the ability of the refinery to access a wider slate of crude oil feedstock, which will help increase the competitive position of the site," Exxon spokeswoman Stephanie Cargile said.

Refiners and pipeline companies have launched many similar projects to gain access to inland U.S. crude that is so plentiful it trades at a sharp discount to other global crudes.

Genesis said the pipeline will have an ultimate capacity of 350,000 barrels per day (bpd) and could deliver crude bound for refineries other than Exxon.

Genesis chief financial officer Bob Deere said the Baton Rouge plant's Anchorage tank farm has connections to other refineries, but he declined to say which plants also would receive crude from the new infrastructure.

Deere also declined to specify where in the United States the crude would come from, except to say it "would have the potential of coming from anywhere where it could be transported by barge or train."

That could include crude moved south by barge from North Dakota's Bakken shale play or crude moved by rail and barge from Ohio's Utica play.

The Port Hudson tankage and new pipeline are expected to be built by the end of 2013 followed by the offloading facility completion in the second quarter of 2014, Genesis said.

Exxon's Baton Rouge refinery is the nation's third-largest.

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