UPDATE 1-Tesoro delivering first Bakken crude unit train to California

Wed Sep 11, 2013 10:00am EDT
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* Co's N. Calif. refinery increasing crude by rail shipments

* Tesoro Washington state rail-to-barge project on track

* Utah refinery expansion on target to wrap up in late 2014

By Kristen Hays and Erwin Seba

HOUSTON, Sept 11 (Reuters) - Independent refiner Tesoro Corp was delivering the first unit train of North Dakota Bakken crude to its northern California refinery on Wednesday, Chief Executive Officer Greg Goff told analysts at an energy conference.

Goff said at the Barclays Energy-Power Conference in New York that the delivery was part of Tesoro's efforts to increase processing of cheaper inland U.S. crude in place of more expensive imports and Alaskan crudes.

The 166,000 barrel-per-day (bpd) Golden Eagle refinery in Martinez, California, had been receiving about 5,000 bpd of Bakken crude on mixed-freight trains. Goff said Wednesday's delivery would be the first so-called unit train, or one that carries only crude oil.

West Coast refiners, isolated from other markets by the Rocky Mountains and a lack of pipelines moving crude west, are increasingly turning to rail to access cheaper crudes more readily available to peers in other markets.

A year ago, Tesoro started up a 50,000 bpd crude offloading system at its 120,000 bpd Anacortes, Washington, refinery. Other refiners in the state, including BP Plc and Phillips 66 , are building infrastructure to do the same.   Continued...