Could Philadelphia Become 'Cushing East'?
The common ground that Canopy and Enbridge discovered materialized into a JV called Eddystone Rail Co., which Enbridge formally announced Nov. 26 of last year. Enbridge owns a 75-percent stake in the JV, with Canopy holding the remaining interest.
"We saw some great potential on the Delaware River with the refining capacity out there," said Kevin Hatfield, vice president of Enbridge Gathering Systems.
Approximately 550,000 barrels per day of crude is currently being shipped by rail out of the Bakken and more than 70 percent of that volume goes to the Gulf Coast, Hatfield noted. With North Dakota's oil production rising toward an estimated peak ranging from 1.2 to 2.1 million barrels per day, pipelines cannot be built fast enough to accommodate the state's surging production growth, he added. For Enbridge, directing production to the East Coast by rail represents one near-term solution to easing export capacity constraints.
"That's one of the beauties of rail," said Hatfield. "It's quick to market."
Re-Purposing and Expanding Existing Infrastructure
The first phase of the project, which the JV expects to conclude by the end of this year, entails reconfiguring the existing rail loop to accommodate unit trains with up to 120 tank cars – the equivalent of approximately 80,000 barrels per day of crude oil. In addition, the JV will install crude offloading equipment, refurbish the existing oil storage tank and upgrade the site's loading facility for outbound barges.
The JV will look to expand the facility to receive up to 160,000 barrels per day of crude via rail and barge by late 2014. It is also exploring a Phase 2 for the project: possibly adding distribution pipeline capacity to the PES Philadelphia, Monroe Trainer and PBF Paulsboro refineries and expanding fungible crude storage capacity to at least 400,000 barrels. After Phase 1, the projected time to receive, unload and turn around a unit train will be within 12 hours. Phase 2 would trim approximately 4 hours off that period.
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