US Calumet expands crude logistics to supply Texas refinery

06 November 2013 14:13  [Source: ICIS news]

HOUSTON (ICIS)--Calumet is expanding its crude oil logistics system to supply crude from Texas’ Eagle Ford shale region to Calumet’s refinery in San Antoniothe US-based producer of specialty hydrocarbon products said on Wednesday.

Calumet said that it sealed a 15-year deal with midstream logistics firm TexStar under which TexStar will construct, own and operate a 30,000 bbl/day crude oil pipeline system “that will supply significant volumes of Eagle Ford crude oil to Calumet's San Antonio, Texas, refinery.”

The 50-mile (80-km) pipeline will supply "at least" 10,000 bbl/day of Eagle Ford crude oil to Calumet's Elmendorf terminal, which is a key supply hub for the San Antonio refinery, the company said.

Calumet said that the pipeline would significantly reduce its cost to transport crude oil to the San Antonio refinery, where it currently receives crude oil deliveries by truck. 

The pipeline is expected to come into service in the fourth quarter of 2014. Financial terms were not disclosed.

"We expect this agreement will help to further improve the long-term profitability of our San Antonio refinery," said Jennifer Straumins, Calumet’s president and chief operating officer.

"By year-end 2014, the refinery will begin receiving significant volumes of Eagle Ford crude oil via the TexStar line, thereby enabling us to realise significant transportation cost savings on our delivered feedstock," Straumins said.

She added that Calumet expects to complete an expansion of a crude unit at the San Antonio refinery in the first quarter of 2014, bringing the refinery’s capacity to 17,500 bbl/day, from 14,500 bbl/day.

Also, Calumet recently completed a project that allows the San Antonio refinery to blend heavy reformates, light naphtha and ethanol to produce up to 3,000 bbl/day of higher-value finished gasoline, she said.

“These projects, in concert with our ongoing efforts to source increased volumes of cost-advantaged Eagle Ford crude oil, should serve to greatly enhance the financial performance of the San Antonio refinery in the years to come," Straumins said.

By: Stefan Baumgarten
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