US-based downstream energy company Phillips 66 has signed rail and pipeline agreements to improve the supply of cost advantaged North American crude oil to its refineries in the country.
The company has entered into agreements with Enbridge Energy Partners, Targa Resources Partners, and Magellan Midstream Partners for rail loading, terminal services, and pipeline logistics providers for an improved access to the advantaged oil.
The financial details of the agreements were not disclosed.
Phillips 66 chairman and chief executive officer Greg Garland said access to the advantaged crude oil will help the company to gain value in its refining and marketing businesses.
"We are aggressively pursuing increased access to advantaged crudes in North America by partnering with leading third-party transportation providers and better leveraging our own system capabilities," Garland added.
Under a three-year agreement, Enbridge Rail, a subsidiary of Enbridge Energy Partners, will load Bakken shale crude at its Berthold terminal through railcar and transport about 35,000 to 40,000 barrels per day (BPD) by November to Phillips’ refineries on west and east coast.
Targa Resources Partners, under a five-year agreement will provide rail unloading and barge loading services for the company.
It will unload US or Canadian crude oil from railcars at Traga’s Tacoma terminal and barge load for Phillips’ refinery in Washington.
Under the final agreement Magellan Midstream Partners, the crude oil will be supplied through Magellan’s pipelines near Phillips’ refinery in Ponca City, Oklahoma.
In addition, Phillips 66 is also investing in its own transportation assets in Oklahoma to transport an additional 40,000 BPD of Mississippian Lime crude to the Ponca City Refinery.