Thursday, August 21, 2014
Inquirer Daily News

Oil trains to cross PA for Delaware River refinery

'Clean fuels' plan on hold while cheap North American crude pours in

Oil trains to cross PA for Delaware River refinery

Tom O'Malley's PBF Energy, which operates oil refineries at Delaware City, Paulsboro and other East Coast sites, says here that it plans to "further expand crude by rail shipments" and by barges "at the company’s 190,000 barrels per day Delaware City Refinery" beyond the current 20,000 barrels/day it's shipping from Alberta and North Dakota.

Work is "underway to more than double rail offloading capacity to 40,000+ b/d in September 2012 and 110,000+ b/d by January 2013," PBF says. Delaware is the only refinery of its type "that can run lower-cost, Western Canadian Heavy crude oil, giving us a competitive edge.

"We are also keeping our options open by barging Bakken [crude from wells in North Dakota] from regional third-party terminals into Delaware City and Paulsboro, [replacing] more expensive Brent-based crudes.”

“These new crude fields in the U.S. and Canada are game changers for our East Coast refineries," added PBF boss Tom Nimbley in the statement. "We have committed to lease a significant number of coiled and non-coiled tank cars" at least until competitors who can process the North American crude are able to build similar facilities. PBF is adding an office in Calgary, Alberta "to further expand our upstream contacts and sourcing options.”

PBF re-opened the shuttered refinery with a $30 million promise of state assistance and talked grandly of investing $1 billion in a modernized plant to reduce oil's sulfur content for "clean fuels."

That clean-fuels proposal is still in the works, PBF spokesman Jeff Dill told me. It depends, as PBF has previously said, on negotiating union labor agreements, on getting workable state and federal environmental permits and conditions, and on PBF generating enough internal cash to fund the project.  Dill also said the increased rail and barge use will be relatively modest, compared to current traffic.

See also Doug Rainey's note here.

Joseph N. DiStefano
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PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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