Phillips Chooses Rail Over Pipelines to Get ND Oil to Its Refineries
Wednesday, March 20:
Phillips 66 on Wednesday became the latest company to get more U.S. crude through rail to its refineries, hoping to save money and improve its margins.
The company is “aggressively pursuing” access to cheaper domestic crude by rail in order to “capture significant value” for the business, Phillips 66 Chairman and Chief Executive Greg Garland said in a statement.
It signed agreements with the rail subsidiary of Enbridge Energy Partners LP to transport Bakken shale oil, with Targa Resources Partners LP for services in Washington state to transport U.S. and Canadian oil by rail and barge, and with Magellan Midstream Partners LP to transport the cheaper crude through pipelines near a Phillips 66 plant in Oklahoma, replacing more expensive West Texas Intermediate crude with oil from the nearby Mississippi Lime formation.
Phillips 66 is hardly alone. Competitors such as Valero Energy Corp. and Tesoro Corp. are also using trains as well as barges and other modes of transportation to get to the cheaper domestic oil.
Transporting crude by rail is booming, and analysts are quick to point out that it is no fad.
Railroads have essentially worked as the enablers of the North American production boom.
One more reason to accumulate EEP while it is below 30.
They have a control station just eight miles from here, I should ask them if they have considered partnering with Calumet on running Great Lakes tankers to the east coast.