Could Philadelphia Become 'Cushing East'?

The market has already responded favorably to the project. Eddystone has secured a revenue customer for Phase 1, Dallas-based Bridger Logistics.

"It's a very interesting dynamic," said Johnson. "We're beginning to go out and have commercial discussions about Phase 2. Phase 2 is very interesting to more people than Phase 1."

One key distinction between the original Cushing and its would-be cousin in the Northeast is that the former ties into an extensive pipeline network that is virtually non-existent in the Philadelphia region. As a major North American pipeline operator, Enbridge does not rule out the possibility of building new eastbound crude oil trunklines to Eddystone. However, the company would only consider making such capital investments in the longer term with a combination of robust demand at Eddystone and dramatically tighter rail capacity. Moreover, installing new pipeline could take upwards of 3 years.

"It's not an impossibility, but it's not an easy task," said Hatfield. "That section of the country is heavily populated, congested and there's a lack of existing right-of-way. At least for the short term, we see [Eddystone] being rail-focused."

"Once the refiners understand that this is a reliable source of crude, I think the demand is going to push the market to more than it is now," said Holran. "With the number of customers, refineries in this area, Enbridge is focused on getting this up and running but we always have an eye on what's next."

Although Canopy and Enbridge will have to wait and see what the future holds for the Eddystone crude-by-rail terminal, Johnson remarked that Philadelphia-area refiners' receptiveness to the project has been encouraging.

"It's been a very warm embrace, it's been nice to work with them," he concluded. "You're bringing them cheap oil."


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Edward Young  |  May 22, 2013
This is the perfect solution for supplying the Northeast refineries. The cost, time, and regulations to build/rebuild pipelines would be enormous. Forget the differance in transportation costs rail vs pipeline. How many billions of dollars and how many years before an adequate pipeline system could be built. There is another player rapidly coming into the game. The production of crude, diesel, and other liquid and gas commodties being produced from natural gas.Most notably at the wellhead. This technology will recover stranded and flare gas situations and has the potential to take the place of building extensive and expensive pipelines.The economic potential of NG to GTL to a refinery or chemical company can be a leading force of American independence of imported oil or gas.
Randy Parsons  |  May 20, 2013
Nice job. Its Great to see companies doing new and exciting things to use and save the past. As we all know if you would have tried to build a new refinery it would have never got past the permitting process. Thanks