October 29, 2012 [The Advocate] - Six months ago, NuStar Energy completed a rail facility at its St. James Terminal that now unloads 80,000 barrels of oil a day — as much as a pipeline — from North Dakota’s Bakken Shale.
By the end of the year, those shipments will climb to 100,000 barrels a day, and the company is already planning a second rail facility to handle added volume from the shales, said Danny Oliver, NuStar’s senior vice president of marketing and business development.
“All of these shale developments popping up around the United States have one thing in common, and that’s the absence of infrastructure,” Oliver said. Increasingly energy companies in the Bakken and elsewhere are turning to rail. Oliver said NuStar expects to be transporting crude by rail for quite some time.
Companies are already building “unit-train” facilities in both the Niobrara and Piceance, he said.
In a unit train, all the cars ship from the same place, carrying the same cargo, to the same destination. The St. James Terminal can unload up to 120 cars at a time.
When an oil train rolls into the terminal, workers break it into two 60-car segments, said Jean Zeringue, NuStar vice president and general manager of operations. A crew of contract workers hooks the dry-connect fittings — so there are no drips — at the bottom of the cars to a below-ground gathering system.
The rest of the process is automated, Zeringue said, and includes a proprietary vapor-balancing system so there are no emissions.
The NuStar St. James terminal can unload a train in 12 hours — four hours to break up the train and connect the cars, four hours to offload the oil and four hours to disconnect and reassemble the train, he said.
Oliver said that, in theory, the terminal can offload two trains a day, or 140,000 barrels a day, but everything would have to work just right.
The current rail facility is a joint venture with EOG Resources, which owns most of the facility’s offloading capacity, Oliver said. NuStar is limited to 20,000 barrels of the current daily capacity, but the company will own all of the new rail facility.
The new facility will cost around $40 million, and NuStar expects it will service three or four customers, Oliver said. The company already has some commitments for that line.
From the train, the oil is pumped to one of NuStar’s storage tanks, the largest of which can hold 680,000 barrels of oil, or 28.6 million gallons, Zeringue said. NuStar blends the crude to each refinery’s specifications — the facility services most of the Gulf Coast’s refineries — then ships it out via pipeline or by the Mississippi River.
The facility can move up to 60,000 barrels of oil, or 2.5 million gallons, an hour.
When NuStar bought the facility in 2006, the St. James terminal had 3.3 million barrels of storage. The facility can now store 9 million barrels of oil, and the San Antonio, Texas-based firm expects to increase that to 11 million barrels by 2016.
