March 13, 2012 [OPIS] - Sunoco said recently that it plans to expand refined products storage capacity at its Eagle Point oil products terminal in order to ensure reliability of supply and quell concerns about possible supply disruptions in the Northeast as a result of reduced refining capacity.
Sunoco said that Sunoco Logistics’ Eagle Point terminal has 3 million bbl of active storage, 2 million bbl of additional storage returning to service in 2012, and still more storage capacity available to return to service.
This is in line with OPIS report on Dec. 19 that the Eagle Point terminal will have at least 500,000 to 1 million bbl of new clean products storage capacity at its Eagle Point, N.J., oil terminal ready for operation around the end of the first quarter or early second quarter. The terminal could raise its capacity further after the completion of the first quarter expansion, industry sources told OPIS last year.
Sunoco Inc. is a major tenant at the Eagle Point terminal as it continues to export diesel produced at its 335,000-b/d Philadelphia refinery from that location. The now idled Marcus Hook refinery does not produce ULSD. Besides Sunoco Inc., the Eagle Point terminal is also open to third-party tenants. The expanded capacity could draw more third-party tenants to Eagle Point.
The Eagle Point terminal has about 60% of its storage capacity allocated to clean products and 40% to dirty, industry source said.
Larger Tankers
Sunoco said that the terminal has improved the ability to handle large vessels at its deep water marine docks, which can handle vessels of 600,000-bbl capacity (Aframax) and 1-million-bbl capacity (Suezmax). The terminal has also upgraded its ability to handle railcar off-loading at Eagle Point.
Sunoco Logistics has installed pipeline connectivity between Eagle Point and the Colonial Pipeline, Laurel Pipeline and Harbor Pipeline systems, which supply key Northeast markets.
The company has developed plans to reverse pipelines to feed Philadelphia’s high-volume Belmont Terminal, which is an important regional supply point for truck loading and deliveries.
Sunoco Logistics is also looking at available pipelines that could be reversed to bring product from New York Harbor to the Philadelphia area. Eagle Point, with its vast storage capabilities and multiple pipeline connections, can supply a full slate of refined products to Pennsylvania, New Jersey and New York markets.
The terminal can also send outbound shipments to Baltimore and New England ports via marine vessels. Eagle Point is also connected to a truck rack which supplies gasoline and ultra-low-sulfur diesel (ULSD) to local markets.
In addition, Marcus Hook can receive products via the Delaware River, as well as local refineries, and distribute them through operating pipelines to various markets. Although Sunoco is doing its part to ensure that the Northeast is well supplied with gasoline, diesel and other products, it will take more than the efforts of one company, the company said.
“We have every reason to believe the rest of the industry, and the market as a whole, will respond accordingly,” Sunoco said.
Meanwhile, traders expected gasoline prices in New York Harbor to rise significantly in spring based on the prevailing Northeast market fundamentals and blending economics, but the extended trend of weak gasoline demand remains a huge concern.
A continuous weak demand could help limit any significant price spike. The Northeast is expected to rely more on supplies from the Gulf Coast as well as imports from Europe, India and Canada o make up for the reduced production capacity.
