September 13, 2013 [OPIS] - Phillips 66 and Targa have reached a mutual agreement to end a five-year contract that began in August 2012 to provide rail unloading and barge loading services for crude oil at Targa's Tacoma, Wash., terminal, a Phillips 66 spokesman told OPIS on Thursday.
This service was for delivering U.S. and Canadian heavy crude to Targa’s terminal in Tacoma via rail for barge loading, and the barges would then sail to Phillips 66’s 100,000-b/d Ferndale refinery, which is north of Tacoma.
“Phillips 66 and Targa determined that it was not feasible to move forward with constructing the new facilities at Tacoma that are required for this transaction and mutually agreed to terminate the contract,” the spokesman said.
Termination of this agreement will have no impact on other business arrangements between Phillips 66 and Targa.
“A key ongoing strategy for Phillips 66 is to increase supplies of cost-advantaged North American crude oil to our U.S. refineries,” the spokesman said.
“We will continue to supply the Ferndale refinery with advantaged crude oil, primarily from the Bakken region, via alternate arrangements,” he added.
The refinery is planning to install a rail offloading facility with capability to offload 30,000 b/d of crude oil which is expected to be operational by late 2014.
Phillips 66 had said that it has secured access to a third-party rail-loading facility in North Dakota and the company has received the first batch of railcars from the 2,000 ordered in 2012.
These railcars initially will be used to deliver Bakken crude oil west to the Ferndale Refinery and east to the Bayway Refinery.
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