Phillips 66, Targa end crude-by-rail deal

Wed Sep 11, 2013 6:06pm EDT
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* Five-year deal ended after one year

* Phillips 66 building own rail facility at Washington refinery

* Company says will continue efforts to run cheaper crudes

By Kristen Hays

HOUSTON, Sept 11 (Reuters) - Independent U.S. refiner Phillips 66 has ended its five-year crude supply contract with energy logistics company Targa Resources Partners LP, the company said on Wednesday.

"Phillips 66 and Targa have reached a mutual agreement to end a five-year contract that began in August 2012 to provide rail unloading and barge loading services for crude oil at Targa's Tacoma, Washington terminal," Phillips 66 said.

Phillips 66 did not explain the decision to end the deal with Targa, which was supposed to ramp up offloading capability to handle up to 30,000 bpd.

Targa did not immediately return a call for comment.

The original deal, which was not announced until March 2013, called for inland U.S. and Canadian heavy crude delivered via rail to Targa's terminal to be loaded onto barges for delivery to Phillips 66's 100,000 barrels-per-day (bpd) refinery in Ferndale, Washington.   Continued...