Genesis Energy plans to spend about $125 million on new rail and pipeline infrastructure to connect ExxonMobil's Baton Rouge, Louisiana, refinery to more than 500,000 b/d of new crude supply, the midstream company said in a statement Monday.
The project includes upgrades to the company's Port Hudson, Louisiana, terminal including barge and truck improvements and construction of a new 350,000 b/d pipeline running from the terminal to a tank farm connected to the refinery.
Genesis will also build a new crude oil unit train facility at the Baton Rouge Maryland Terminal, the company said.
"Since there is a barging component and a rail component [the project] would accommodate crude from anywhere domestically," Genesis CFO Bob Deere said Monday in an interview. Deere would not name the types of crude that might arrive by rail or barge to the facilities.
The project's construction will begin early in 2013, and the terminal upgrades and new pipeline should be completed by the end of the year. Completion of the rail facility is scheduled for the second quarter of 2014, the company said.
The project could attract Bakken Shale crude from North Dakota, Eagle Ford Shale crude from South Texas and heavy crude from Canada, among other grades, said Andy Lipow of Lipow Oil Associates. ExxonMobil's Baton Rouge refinery processes both light sweet and heavy sour crudes, he said.
An ExxonMobil official was not immediately available to comment.
At Port Hudson, Genesis plans to add 200,000 barrels of storage capacity to an existing 216,000 barrels of tank capacity and improve its barge dock and truck station.
The new pipeline will be 20 inches in diameter, 18 miles long and have potential access to other Baton Rouge area refineries with a combined capacity of 140,000 b/d, Genesis said.
Genesis entered into definitive agreements with ExxonMobil. For the agreements, ExxonMobil will secure preferential rights for throughput at the facilities and grant Genesis a land lease at the Maryland Terminal site, Genesis said.
"We are very pleased with the opportunity to partner with [ExxonMobil]," Deere said. "They are a premiere company. We have been operating in Louisiana for many years, and we are pleased to have the opportunity to develop in the Baton Rouge area."
