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Eastern Railroad Discussion > PBF Energy bets big on crude-by-rail to feed ECoast ref


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Date: 11/26/12 12:01
PBF Energy bets big on crude-by-rail to feed ECoast ref
Author: GregR27

The second big announcement today for crude by rail to the east coast ( re BobE's Eddystone post a few threads below )

From Thomson Reuters a few minutes ago..


* East Coast refiner to lease 2,400 railcars to carry crude-Filing

* PBF to expand Delaware City crude-by-rail terminal

* PBF joins Enbridge, Carlyle Group in boosting crude-by-rail

* Rail to deliver North American oil at discount to Brent

PBF Energy plans to lease thousands of railcars to bring cheap crude from Canada and the U.S. Midwest to its East Coast plants, betting on railroad shipments to resuscitate the region's struggling refining network.

In an SEC filing earlier this month, New Jersey-based PBF Energy - which owns nearly one-third of East Coast refining capacity - said it will scale back a crude supply deal with Norway's Statoil and instead lease 2,400 railcars to ship crude from Western Canada and the Midwest to its East Coast plants.

By early 2013, the filing said, PBF Energy will expand its Delaware City, Delaware, rail terminal to handle 110,000 barrels per day (bpd) of crude, up from 40,000 bpd now.

Enbridge Inc, Canada's No. 2 pipeline company, on Monday announced its own plans to develop rail facilities to deliver 80,000 barrels per day of light oil from North Dakota's prolific Bakken shale oil field to refineries around Philadelphia

(Snip)



Date: 11/26/12 12:13
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: MWP

any details on the leases? How long and how much is the typical lease?



Date: 11/26/12 12:25
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: strench707

How does Del. City currently receive shipments? Is it routed via the Port Road to Perryville and North on the NEC or from Philly South?

Thanks

Davis



Date: 11/26/12 12:30
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: GregR27

MWP Wrote:
-------------------------------------------------------
> any details on the leases? How long and how much
> is the typical lease?

fyi...

PBF Energy declined further comment on the firm's crude-by-rail plans - PBF Energy is in an SEC-mandated quiet period before it goes public.

PBF Energy said railroad shipments of crude will increasingly supply both its 190,000-bpd Delaware City refinery, and its 180,000-bpd Paulsboro, New Jersey, plant, 30 miles to the north, which will receive onward shipments from the rail terminal by barge.

PBF Energy did not say where it leased the railcars, but said that 1,600 of them are coiled and insulated to transport heavy Western Canadian oil sands crude without diluents.

Rail transport is still attractive because PBF Energy's East Coast refineries are configured to process heavy, sour crudes like those available in Western Canada - some of which trade at a discount of $30 or more to Brent crude - since there is little extra space available on pipelines that ship crude onward from the U.S. Midwest.



Date: 11/26/12 13:04
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: Out_Of_Service

strench707 Wrote:
-------------------------------------------------------
> How does Del. City currently receive shipments?
> Is it routed via the Port Road to Perryville and
> North on the NEC or from Philly South?
>
> Thanks
>
> Davis

the first cpl of movements came via the high line in Philly, other movements came down the Delmarva Sec to Porter with a backup move then onto the Reybold industrial a cpl movements went down the Shellpot and then onto the New Castle Sec to Porter



Date: 11/26/12 14:29
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: Lackawanna484

transporting the heavy Canadian crude without diluents is a big deal. if their plan works, it will be a significant advancement in the industry

I wonder if the rail cars will be custom made? Insulated and coil heated cars in that number seems to be pretty unusual order.



Date: 11/26/12 14:48
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: erie833

Lackawanna484 Wrote:
-------------------------------------------------------
> transporting the heavy Canadian crude without
> diluents is a big deal. if their plan works, it
> will be a significant advancement in the industry
>
> I wonder if the rail cars will be custom made?
> Insulated and coil heated cars in that number
> seems to be pretty unusual order.

Big deal indeed....it's going to take a lot to fill our coal train void. Maybe these are the cars they will use?

http://www.trainorders.com/discussion/read.php?2,2926930

RAD



Date: 11/26/12 14:59
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: Lackawanna484

thanks for the link.



Date: 11/26/12 15:00
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: GregR27

Lackawanna484 Wrote:
-------------------------------------------------------
> transporting the heavy Canadian crude without
> diluents is a big deal. if their plan works, it
> will be a significant advancement in the industry
>
> I wonder if the rail cars will be custom made?
> Insulated and coil heated cars in that number
> seems to be pretty unusual order.


Being a good neighbour....we are all to happy to sell it to you : )



Date: 11/26/12 15:43
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: tehachapi-dave

Question on Routing

To get to Delaware City from the west are they coming down the Port Road and north or down the Reading Line to Philly and then south?

Thanks,

Dave



Date: 11/26/12 16:41
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: Out_Of_Service

tehachapi-dave Wrote:
-------------------------------------------------------
> Question on Routing
>
> To get to Delaware City from the west are they
> coming down the Port Road and north or down the
> Reading Line to Philly and then south?
>
> Thanks,
>
> Dave

the normal routing is Port Road to the Delmarva reverse move at Porter and east to Delaware City



Edited 1 time(s). Last edit at 11/26/12 16:58 by Out_Of_Service.



Date: 11/26/12 16:58
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: Lackawanna484

GregR27 Wrote:
-------------------------------------------------------
> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
> > transporting the heavy Canadian crude without
> > diluents is a big deal. if their plan works,
> it
> > will be a significant advancement in the
> industry
> >
> > I wonder if the rail cars will be custom made?
> > Insulated and coil heated cars in that number
> > seems to be pretty unusual order.
>
>
> Being a good neighbour....we are all to happy to
> sell it to you : )

Thank you.

(Although we all know that many Canadians would prefer to sell their oil on the world market for $15-$25 a barrel more. If they could find a way to get it to an export location.)



Date: 11/26/12 17:43
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: 1

which rr will it take csx or ns?



Date: 11/26/12 18:16
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: alco539

Anyone know who's reporting marks are RCRX ?



Date: 11/26/12 18:57
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: knotch8

The routes listed by out_of_service are on NS. It's possible that it could come on CSX to somewhere in the area, either the Philadelphia or Wilmington area, but the final delivery to Delaware City, DE, will have to be on NS. Besides, CSX and NS don't interchange much in the area, I don't think, but I'm sure that someone else has better information.



Date: 11/26/12 20:37
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: Out_Of_Service

knotch8 Wrote:
-------------------------------------------------------
> The routes listed by out_of_service are on NS.
> It's possible that it could come on CSX to
> somewhere in the area, either the Philadelphia or
> Wilmington area, but the final delivery to
> Delaware City, DE, will have to be on NS.
> Besides, CSX and NS don't interchange much in the
> area, I don't think, but I'm sure that someone
> else has better information.

there is an unused interchange track north of Perryville between CSX and the NS Port Road but it would require a run move to get from CSX onto the Port Road and also trackage rights on NS and Amtrak unless CSX delivers to NS at that point and NS makes the delivery for CSX



Date: 11/27/12 07:02
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: brfriedm

These trains are coming down the Port Road and are obviously heading north on Amtrak's NEC. They then enter NS's Shellpot Secondary at Regan interlocking and head towards NS's Edgemoor yard. Before they get to the bridge crossing the Christina River, they hang a right on the new wye NS built a few years back and head south on NS's New Castle Secondary. By doing this route, they can enter the branch directly to Delaware City without running around their train. There is discussion to put the diamonds back in at Porter so the trains can enter at Davis in Newark, Delaware so they can just roll straight onto the branch to Delaware city. This is just rumor for now but if they get the traffic they are talking about, would almost be a necessity. Hope this helps.

Bruce



Date: 11/27/12 07:55
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: Lackawanna484

The refinery previously received some of its crude from Statoil, the Norwegian company. That oil was priced in Brent ($20-$25 a barrel higher than Bakken, at times). Even with the much higher cost of shipping by rail, the US and Canadian supplied oil will be several dollars cheaper.



Date: 11/27/12 12:48
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: SOO6617

Lackawanna484 Wrote:
-------------------------------------------------------
> The refinery previously received some of its crude
> from Statoil, the Norwegian company. That oil was
> priced in Brent ($20-$25 a barrel higher than
> Bakken, at times). Even with the much higher cost
> of shipping by rail, the US and Canadian supplied
> oil will be several dollars cheaper.

But where was Statoil sourcing the Crude Oil? Statoil is a big player in the North Dakota Bakken.



Date: 11/27/12 13:42
Re: PBF Energy bets big on crude-by-rail to feed ECoast
Author: Lackawanna484

SOO6617 Wrote:
-------------------------------------------------------
> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
> > The refinery previously received some of its
> crude
> > from Statoil, the Norwegian company. That oil
> was
> > priced in Brent ($20-$25 a barrel higher than
> > Bakken, at times). Even with the much higher
> cost
> > of shipping by rail, the US and Canadian
> supplied
> > oil will be several dollars cheaper.
>
> But where was Statoil sourcing the Crude Oil?
> Statoil is a big player in the North Dakota
> Bakken.

I thought it was from Europe, thanks for the heads up.



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