NuStar May Receive Canadian Oil at New St. James Terminal

NuStar Energy LP, the second-largest independent liquids terminal operator in the U.S., may unload heavy Canadian oil at a new train terminal in St. James, Louisiana, this year.

The San Antonio-based company is seeking contracts for a second 70,000-barrel-a-day unit train terminal in St. James, which it expects to be in service in the fourth quarter. A three-year commitment has been signed with Great Northern Oil Co., which will move Bakken crude from North Dakota, the company said.

NuStar is increasing rail unloading, storage, and dock capacity in St. James as production booms in Canada and North Dakota. An additional 799,000 barrels a day of output in those areas is due to come online in 2013 and 2014, according to the Canadian Association of Petroleum Producers and U.S. Energy Information Administration. Canadian companies are seeking additional outlets for heavy bitumen from oil-sands formations.

“We’re trying to be accessible to as many types of crude as we can be,” Danny Oliver, senior vice president of marketing and business development, said in a phone interview. “We’re talking with Bakken producers but we’re also talking with Canadian producers about moving dilbit.”

The company is converting one dock to handle exports and adding another, both of which will be in service next year. In the past, the terminal only accepted inbound shipments of crude.

“The flow is reversing,” Oliver said. “We’ve got more crude coming in by rail and it wants to go out by water.”

At the same time, storage capacity will increase to about 11 million barrels from the current 9 million.

More Blending

The influx of extra-light crudes from the Bakken and Eagle Ford formation in Texas is increasing the need for storage.

Customers are seeking more space in storage tanks as they are looking to do additional blending with the lighter crude oil, Oliver said.

The first unit train at St. James came online in April 2012 and construction of the second began early this year, according to the company.

The new terminal has a nameplate capacity of about 70,000 but may be able to offload more than two trains in 24 hours, boosting capacity to more than 100,000, according to Oliver. New contracts that are signed for the second unit train terminal may also include commitments for shipping and storage of certain amounts, he said.

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