November 24, 2015 / 9:50 PM / 2 years ago

Tesoro a step closer to final decision on proposed railport

HOUSTON, Nov 24 (Reuters) - A Washington state council on Tuesday released a massive government review of Tesoro Corp’s proposed $210 million railport, the latest milestone in the company’s hopes to build the largest oil-by-rail terminal in the United States.

The 360,000 barrels-per-day project would move domestic and Canadian crude via train to Washington’s Port of Vancouver on the Columbia River, where it would be transferred to vessels to feed West Coast refineries, largely in California.

Tesoro had originally targeted late 2014 for startup, but the lengthy state review and growing opposition in light of multiple fiery crude train crashes since mid-2013 led to repeated delays.

Tuesday’s release of Washington’s Energy Facility Site Evaluation Council (EFSEC)’s draft environmental impact statement on the project opened a 45-day stretch for public comment. After that, the council will submit its final report and recommendation to Gov. Jay Inslee, who has the final decision on whether it will be built.

The report, which exceeds 1,000 pages including lists of resources used to compile it, does not take a position on the project. Instead, it examines its purpose, potential environmental impacts and how to mitigate them, safety considerations and other aspects.

The report said all tank railcars that move crude to the proposed facility must meet the latest federal standards announced earlier this year with thicker hulls, steel shields on the front and back, and protections for valves and fittings where crude goes in the top and drains out the bottom.

This year Tesoro received 210 so-called pressure railcars with more reinforcements designed to contain flammable liquid petroleum gas.

The railport as proposed can receive up to four oil trains per day. According to Tesoro, it will receive mainly North Dakota Bakken and diluted Canadian heavy crude. It also could take shipments from other U.S. shale oilfields in Wyoming and Colorado as well as waxy crude from the Uinta Basin in Utah.

The report also said that if the project is rejected, West Coast refineries could still tap North American crude via rail and pipelines where available as well as truck.

Global Partners LP is expanding an oil and ethanol railport about 50 miles west across the river in Clatskanie, Oregon, where the state did not require such a lengthy and detailed review to receive permits.

When finished in the third quarter next year with an expanded Panamax-capable dock, that railport can potentially handle up to 120,000 bpd of crude. (Reporting by Kristen Hays)

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