Back to the Delta - St. James Rail Yards End the North Dakota Crude Oil Blues

Over the past two years oil terminal operators in St. James, LA have built rail receipt facilities that handle over 150 Mb/d of crude oil – most of it from North Dakota. That crude is chasing Gulf Coast prices that can be $20/Bbl higher than the Midwest.  Today we explain how NuStar Energy has expanded their St James crude oil terminal to capitalize on those price differentials.

So far in this blog series we have described how five crude oil terminals are adapting to a changing supply position in the Gulf Coast region caused by increased domestic US and Canadian production. The first four episodes covered terminals in the Houston area (see ECHO, Nederland, Oiltanking and Magellan). The fifth and sixth episodes in the series focused on the Louisiana Offshore Oil Port (see Thrown For A Loop Part 1 and Part 2).

This time our focus turns to NuStar Energy LP that owns the largest volume of crude oil storage at St. James, LA. NuStar Energy L.P. is a publicly traded, MLP based in San Antonio, TX with 8,433 miles of pipeline; 84 terminal and storage facilities and a 50 percent share in two asphalt refineries. NuStar is a spin off from Valero midstream transportation assets. The company’s focus over the past two years has moved away from asphalt, refining and trading activities that are exposed to commodity prices towards fee based transportation and storage. In the process NuStar has built a crude oil infrastructure in the Eagle Ford and a major storage and transportation hub at St. James, LA.

We have previously described NuStar’s crude and condensate gathering and storage activity in the Eagle Ford play (see Knocking on Heaven’s Door Part III). NuStar has developed hubs in Oakville and Petus, TX connected by pipeline via Valero’s Three Rivers refinery to a marine terminal in Corpus Christi. Nustar also recently increased their Eagle Ford footprint by acquiring TexStar Midstream. The focus of this blog will be the company’s crude oil storage and distribution terminal in St. James, LA.

St. James is on the Mississippi River 60 miles upriver from New Orleans and about 60 miles Northwest of the Clovelly, LA landing point for crude imported through LOOP. The map below is reproduced from our recent LOOP terminal blog. It shows the central position that St. James occupies in the Gulf Coast crude oil refining and distribution system. St. James has long been a trading hub for crudes such as the Gulf Coast benchmark Light Louisiana Sweet (LLS) and medium sour Mars. The St. James hub feeds crude to refineries in Louisiana, Mississippi and the Midwest.

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