Hess Corp. has increased the amount of Bakken crude it ships by rail in order to sell the oil to refiners at a higher price.
Hess is shipping 45,000 to 50,000 barrels a day of Bakken crude oil by rail this quarter, Gregory Hill, the company’s executive vice president and president of production, said at the Barclays CEO Energy/Power Conference in New York. That’s up from 29,000 barrels daily in the second quarter.
Rail shipment “is a huge competitive advantage for us,” Hill said. Oil delivered by tank car to terminals near refineries fetches as much as $18 more a barrel than that sold in North Dakota, he said.
The New York-based company plans to increase net Bakken production to 120,000 barrels of oil equivalent a day in 2015, and has built rail capacity of 54,000 barrels of oil a day.
Refiners on the U.S. East and West Coasts are using rail cars to receive shipments of Bakken crude. Tesoro Corp. received its first unit train of Bakken at the Anacortes refinery in Washington earlier this week after completing a $50 million rail terminal project.