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PBF Energy Announces Supply Agreement with Continental Resources for Bakken Crude Oil

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By Business Wirevia The Motley Fool

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PBF Energy Announces Supply Agreement with Continental Resources for Bakken Crude Oil

PARSIPPANY, N.J.–(BUSINESS WIRE)– PBF Energy Inc. (NYS: PBF) announced today the signing of an agreement with Continental Resources Inc. (NYS: CLR) to supply PBF with Bakken crude oil, which will be delivered by rail to PBF‘s double-loop track at its refinery in Delaware City, DE.

Commenting on the transaction, Don Lucey, PBF‘s Chief Commercial Officer, said, “We are pleased to be working directly with Continental Resources, a leader in domestic crude oil production and a major producer and supplier in the Bakken play. We look forward to growing our relationship with them.”

Continental Resources is the largest producer and leaseholder in the Bakken, with significant supply arrangements with refiners on the West Coast, the Gulf Coast, and now the East Coast. Continental Resources President and Chief Operating Officer, Rick Bott, added, “This unique transaction illustrates the emerging shift in the light sweet crude market. In addition to diversifying Continental’s customer base and streamlining our value chain, it allows us to deliver unblended premium Bakken crude to the East Coast – a market that has historically been driven by imports of foreign oil.”

PBF‘s Chief Executive Officer, Tom Nimbley, said, “PBF has made significant investments in acquiring rail cars and developing our East Coast rail delivery infrastructure to increase our access to North American crude oil, which positions PBF to benefit from these cost-advantaged crudes. Delaware City‘s heavy and light crude rail discharge facilities allow us to work directly with producers in Canada and the Mid-continent, like Continental Resources, and provide us with a competitive advantage versus northeast refiners that rely on third parties to deliver North American crude oil.”

PBF also announced that the company opened a new office in Oklahoma City. This office, along with PBF‘s Calgary, Alberta office, will focus on sourcing North American crude oils and feedstocks for the company’s refineries.

PBF: Forward-Looking Statements

Statements in this press release relating to future plans, results, performance, expectations, achievements and the like are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which may be beyond the company’s (PBF Energy Inc. and subsidiaries) control, that may cause actual results to differ materially from any future results, …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Lower Gas Prices? Not Before This Happens

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By Aimee Duffy, The Motley Fool

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Oil giant Hess made news at the beginning of this year when it announced it was exiting the refining business. The company stated it would sell its Port Reading refinery, or close it down if it couldn’t find a buyer by the end of the month. Now the union representing its employees at its the refinery has launched a campaign to find a buyer and save jobs. There is one other thing that would be avoided if the sale is made: higher gas prices.

East Coast gas
Many refineries on the East Coast were forced to shut down during Hurricane Sandy, which prevented them from building up stockpiles of gasoline for the summer driving season. On top of that, refinery closures in Europe and the Caribbean are affecting volumes as well. Some estimates show stocks of gas are 10% lower than they were last year. If the Hess refinery closes, the pain will be exacerbated; the plant primarily manufactures gasoline and heating oil.

Refineries on the Gulf Coast have gasoline surpluses, but there are logistical problems getting that gas to the East Coast. The Jones Act stipulates that business between American ports must be done by American ships with American crews. There is a shortage of tankers fitting the bill, so that option is out. There is also a pipeline that brings gasoline to the East Coast, but it’s already full. An expansion coming on line this summer could help the situation, but if the Hess refinery closes it won’t make near the impact people need it to.

There is hope
Before, owning an oil refinery on the East Coast was a surefire way to lose money. While refineries in the middle of America and on the Gulf Coast could link up to pipelines carrying cheap domestic crude, East Coast refineries were out of luck. Instead, they were forced to buy oil at world prices, which were much more expensive than domestic crude.

But this story is starting to turn around. It turns out, oil producers can make more money if they put their oil on a train to the East Coast. The market for crude there isn’t as saturated as it is at oil hubs in Cushing, Okla., and Midland, Texas, where much oil used to end up.

Refiners like PBF Energy have built up the rail facilities at their refineries, and now receive that cheaper crude, which means its refineries won’t be shutting down any time soon.

Foolish takeaway
PBF has proven that it is possible to win with East Coast refining, and I would be surprised if Hess is unable to find a buyer for its Port Reading facility. Last year, Delta Airlines bought a refinery from Phillips 66 for $150 million, so stranger things have happened.

It’s easy to forget the necessity of midstream operators that seamlessly transport oil and gas throughout the United States. Kinder Morgan is one of …read more
Source: FULL ARTICLE at DailyFinance