NEW YORK (Dow Jones)
A consortium including Australian investment bank Macquarie Group (MQBKY, MQG.AU) said Wednesday that it plans to build a 10-million-barrel oil storage terminal in Louisiana, a $600 million bet on both rising North American crude production and increasing exports of refined petroleum products.
The group, led by closely held storage-tank developer Petroplex International LLC, plans to start construction in the first half of 2013 in St. James Parish, La., and begin operations in 2014. The facility will initially have storage capacity for between four and six million barrels. It is being designed to accommodate an array of liquids, including crude oil; refined petroleum products, such as fuel oil and diesel; chemicals; renewable fuels and bitumen, the thick crude that comes from Canada's oil sands.
Situated between New Orleans and Baton Rouge, the facility is planned for an area with several refineries that are expected to see an influx of crude from Canada's oil sands and U.S. shale formations, which include North Dakota's Bakken and Ohio's Utica, and Texas fields. Those sources are producing more that nearby facilities can process.
Those and other onshore oil fields are forcing a rapid reconfiguration of U.S. energy infrastructure, which has long been geared toward moving imported oil from the Gulf Coast, which hosts the world's largest refining complex, to the nation's interior.
Next week, the Seaway Pipeline, linking Houston to the world's largest oil storage facility in Cushing, Okla., is scheduled to be reversed to carry U.S. and Canadian crude to the Gulf Coast for processing. And Royal Dutch Shell PLC (RDSA) plans to reverse the flow of its Houma-To-Houston Pipeline to deliver crude from gushing Texas fields to Louisiana refineries early next year.
Meanwhile, the North American oil boom has helped the U.S. become a net fuel exporter for the first time since World War II. In April, U.S. refiners shipped out nearly 900,000 barrels a day of gasoline, diesel and other products, mostly to Latin America and Europe. Exports have helped some refiners, including Valero Energy Corp. (VLO), Marathon Petroleum Corp. (MPC) and Tesoro Corp. (TSO) prosper despite flat domestic demand.
The proposed Petroplex facility--which will be linked to long-haul pipelines, refineries, waterways and rail lines--will be able to store either crude ahead of processing or refined products awaiting distribution or export, Petroplex said. Petroplex said the facility will be the only independent "for-hire" storage terminal in the St. James market.
Besides Baton Rouge-based Petroplex and Macquarie, others involved in the project include energy infrastructure developer Quanta Services Inc. (PWR) and Harley Marine Service Inc. founder and Chief Executive Harley Franco, whose company will operate the facility's barge docks.
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