UPDATE 1-Tesoro triples crude-by-rail to northern California

Thu Nov 7, 2013 10:58am EST
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* Tesoro's Martinez refinery running 350,000 barrels per month of Bakken crude

* Washington port rail-to-barge project in permitting phase

By Kristen Hays

HOUSTON, Nov 7 (Reuters) - Independent U.S. refiner Tesoro Corp has tripled the amount of North Dakota Bakken oil delivered by crude-only trains to its northern California refinery since the first such shipment in September, Chief Executive Greg Goff said on Thursday.

He said the 166,000 barrels-per-day (bpd) Golden Eagle refinery in Martinez is running about 350,000 barrels per month from three so-called "unit trains" that carry only crude. The first unit train arrived in September.

"It really just started and is just ramping up," Goff said during Tesoro's third-quarter earnings conference call.

However, he said the third-party offloading facility handling the incoming trains is "pretty much maxed out," so deliveries cannot ramp up further until Tesoro's joint-venture $100 million rail-to-barge oil terminal starts up at a port in Washington.

Both initiatives are part of Tesoro's overall plan to run more inland U.S. and Canadian heavy crudes, which are cheaper than imports, at its West Coast refineries. Rail is a critical factor in getting those crudes to the West Coast, as no major pipelines move crude to that market.

Tesoro already runs 50,000 bpd of Bakken crude at its 120,000 bpd refinery in Anacortes, Washington, where the company started up a crude offloading facility more than a year ago. Phillips 66 and BP Plc also have rail offloading projects in the works to do the same.   Continued...