By: Bob van der Valk
June 5, 2012
Dateline: Terry, Montana
The Irving Oil refinery in St. John, New Brunswick, Canada became the third oil refinery on the East coast to receive 72,000 barrels of Bakken crude oil in a delivery on June 2, 2012.
Irving Oil owns and operates a 300,000 barrrels per day (b/d) refinery and Bakken light, sweet crude delivery is expected to complement the refinery’s feedstocks, which could include both sweet and/or sour crude oil. Bakken crude should help boost St. John refinery’s refining profit margin known in the industry as the crack spread. Bakken crude oil is currently priced at about from $7 to $10 a barrel discount to the benchmark West Texas Intermediate (WTI) crude oil. Railroad tank car freight charges run at about 12-$15 a barrel to the East coast.
Irving could receive about 10,000-15,000 b/d of Bakken Oil crude when the rail delivery operations stabilize in Canada.
The other two Northeast refineries receiving limited volumes of Bakken crude are Phillips 66’s 238,000-b/d Bayway refinery via Global Partners and Sunoco’s 330,000-b/d Philadelphia refinery via Sunoco Logistics.
Bayway refinery is expected to raise its Bakken crude oil intake to about 57,000
b/d in the summer. The Philadelphia refinery is receiving about 20,000-30,000 b/d of Bakken crude oil, and volume could increase in the future, depending on the fate of the
Philadelphia refinery sale to Delta Airlines.
North Dakota March crude oil production jumped by 10.14% from the previous month to 575,489 b/d, according to the latest data issued by the North Dakota State Industrial Commission. About 95% of North Dakota crude production is from the Bakken field.
The information in this article was previously published by Oil Price Information Service (OPIS).
Bob van der Valk is a petroleum industry analyst working and living in Terry, Montana. He can be contacted at (406) 853-4251 or e-mail: tridemoil@aol.com
His viewpoints about the petroleum industry are posted on his web page at: http://www.4vqp.com/pages/12/index.htm
