* Tesoro's Martinez refinery running 350,000 barrels per
month of Bakken crude
* Washington port rail-to-barge project in permitting phase
By Kristen Hays
HOUSTON, Nov 7 Independent U.S. refiner Tesoro
Corp has tripled the amount of North Dakota Bakken oil
delivered by crude-only trains to its northern California
refinery since the first such shipment in September, Chief
Executive Greg Goff said on Thursday.
He said the 166,000 barrels-per-day (bpd) Golden Eagle
refinery in Martinez is running about 350,000 barrels per month
from three so-called "unit trains" that carry only crude. The
first unit train arrived in September.
"It really just started and is just ramping up," Goff said
during Tesoro's third-quarter earnings conference call.
However, he said the third-party offloading facility
handling the incoming trains is "pretty much maxed out," so
deliveries cannot ramp up further until Tesoro's joint-venture
$100 million rail-to-barge oil terminal starts up at a port in
Both initiatives are part of Tesoro's overall plan to run
more inland U.S. and Canadian heavy crudes, which are cheaper
than imports, at its West Coast refineries. Rail is a critical
factor in getting those crudes to the West Coast, as no major
pipelines move crude to that market.
Tesoro already runs 50,000 bpd of Bakken crude at its
120,000 bpd refinery in Anacortes, Washington, where the company
started up a crude offloading facility more than a year ago.
Phillips 66 and BP Plc also have rail offloading
projects in the works to do the same.
Goff said Tesoro and Savage Services, its partner in the
Port of Vancouver project in Washington, submitted applications
for environmental permits in August and the company expects that
approval process to take about a year.
"We continue to expect that facility to be up and
operational sometime late next year or early in 2015," Goff
The 280,000 bpd rail-to-barge project is intended to help
supply cheaper U.S. and Canadian crude to other West Coast
refiners as well as Tesoro's own plants. Tesoro owns four West
Coast refineries and controls nearly one-fourth of the crude oil
refining capacity on the West Coast.
Tesoro has committed to the first 60,000 bpd of throughput
to the port project. It initially would start up with a 120,000
bpd capacity, but Goff said the permits will seek the full
capacity of 280,000 bpd.
He said Tesoro hasn't yet begun marketing that capacity to
"There's not a lot of work to do to get up to the 280,000
barrels a day, so we'll see what the market demand is and make
that decision accordingly," Goff said.
Tim Taylor, executive vice president for commercial,
marketing, transportation and business development for Phillips
66, told Reuters last week that the company sees the
Tesoro-Savage project as a third party option to tap more North
American crude in addition to its own efforts. Phillips 66 has
two refineries in California and one in Washington.
"We're looking at all those options. It's really about the
value they can drive," Taylor said last week.