March 5, 2014 [OPIS] - Construction at the 80,000-b/d Eddystone crude-by-rail facility near Philadelphia is nearing completion, and operations are expect to begin by the end of the first quarter 2014 or soon thereafter, an Enbridge spokeswoman told OPIS on Tuesday.
The first operation date is in line with Enbridge’s original timetable of early 2014 for the rail terminal operational start-up.
The facility is being built primarily by Philadelphia building trades and there are currently as many as 500 workers on site completing the construction of the facility, she said.
Enbridge owns 75% of the Eddystone crude-by-rail joint-venture, and Canopy Prospecting owns the remaining 25% interest. The facility is located along the Delaware City, north of Marcus Hook and south of Philadelphia.
At the Eddystone facility, the crude oil will be transferred from rail to barge and will be delivered to nearby refineries along the Delaware River. However, traders said that Eddystone will supply Bakken crude mainly to Trainer refinery as the other East Coast refiners are self-served with their own crude-by-rail terminals.
OPIS reported on Feb. 19 that Dallas-based logistics company Bridger Logistics was expected to supply Bakken crude to Delta Air Lines’ 190,000-b/d Trainer refinery in Pennsylvania as soon as the Eddystone crude-by-rail terminal is up and running.
Besides Eddystone, Trainer refinery is also receiving Bakken crude from Plains via Yorktown terminal.
The Bakken crude supply deals at Trainer refinery are in line with Delta Air Lines’ plan to boost margins at that Northeast refinery by running more price-advantaged Midcon crude.
Delta Air Lines said in January that it expects to use approximately 50,000 b/d of domestic crude in the March quarter.
The company’s domestic crude supply efforts will continue to ramp up through the year and it expects to average 70,000 b/d for 2014. This lower crude supply is expected to reduce Trainer’s average crude cost for the refinery by $2 to $3 per barrel.
OPIS notes that the crude cost savings will depend on the fluctuating Brent-WTI spread, which determines the competitive cost of Bakken crude against imported crude.
Bridger Logistics, through its subsidiary Bridger Transfer Services LLC, signed a long-term agreement with Eddystone Rail Company LLC to throughput seven unit trains per week — or approximately 80,000 b/d of crude oil — into barges for delivery to U.S. East Coast refineries.
Bridger will bring crude oil to the Philadelphia area from unit trains that will primarily originate out of the Enbridge Rail (North Dakota) LP unit train loading facility in Berthold, N.D.
With at least two more new Northeast crude rail facilities opening up in the first half of 2014, the competition for crude delivery volumes is expected to heat up as crude rail facilities will outnumber refineries.
Location may become an important factor in the heightened Northeast crude logistics competition, with crude rail terminals at close proximity to refineries holding an edge over the rest. The shorter delivery distance between the crude rail facilities and refineries could translate to comparatively lower logistics costs than those that are further away.
Besides Eddystone, Buckeye’s crude-by-rail project at Perth Amboy terminal in New Jersey will be ready for first operations in the second quarter of 2014.
There are at least seven crude-by-rail facilities in the Northeast that are already operational or are set to start up by the end of June 2014.
