Washington Crude Railport Project Delayed

Posted by Michelle Howard
Thursday, May 01, 2014

Tesoro Corp's plan for a crude oil rail-to-barge project at the Port of Vancouver in Washington has been delayed as the company awaits state requirements for an environmental impact statement (EIS), Chief Executive Greg Goff told analysts on Thursday.

The estimated cost of the railport also has risen to a range of $150 million to $190 million, from about $100 million, Goff said.

The joint-venture project with Savage Services had been targeted to start up in late 2014 or early 2015. On Thursday, Goff said construction is now expected to begin during that timeframe, with initial inland U.S. crude volumes running through the railport in mid-2015.

The project will be fully completed a year after construction starts, Goff said.

"The primary delay is waiting for the state to come with their EIS requirements," Goff said. "That puts us somewhere between six to eight weeks behind schedule."

Tesoro submitted environmental permit applications for the project in August last year. The permit is seeking approval for a 380,000 barrels-per-day (bpd) facility, but Goff has said actual volumes are expected to hover at 300,000 bpd.

The railport would serve both Tesoro refineries and others along the U.S. West Coast.

The delay comes after a CSX Corp train carrying crude oil derailed and caught fire in Virginia on Wednesday, spilling oil into a river and forcing hundreds to evacuate.

The CSX derailment was the latest in a spate of crude train derailments and crashes since last summer that have raised concerns about the safety of oil trains.

(Reporting by Kristen Hays; Editing by Nick Zieminski)

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