NuStar, EOG Resources to build 70,000BPD train offloading facility in Louisiana to transport shale crude

By Phaedra Friend Troy

NuStar Logistics (NYSE:NS) and EOG Resources (NYSE:EOG) have entered into a definitive agreement to jointly develop and own a 70,000-barrel-a-day unit train offloading facility in Louisiana to support crude oil transport from various US shale plays.

The rail offloading facility will be built at NuStar's crude oil terminal in St. James, Louisiana, facilitating movement and storage of crude oil production from the Bakken and Eagle Ford Shales, as well as other emerging oil shale plays in the US.

The 8-million-barrel St. James crude oil terminal has interconnectivity to major crude infrastructure, including onshore and offshore pipeline systems, as well as marine, truck and rail access. 

“This project will give our customers much greater ability to move and store production from very significant crude discoveries throughout the US,” said Curt Anastasio, president and CEO of NuStar. “Our St. James terminal is ideally situated in a major crude oil hub and has access to all modes of transportation to effectively get the crude to any number of markets.”

The new project will include rail and unit train unloading facilities, as well as two new storage tanks with a combined capacity of 360,000 barrels of oil. In addition to the 70,000-barrel-a-day capacity, the crude oil receiving terminal will include enough track and other infrastructure to stage another train to await offloading. 

While the rail project is expected to be completed in the first quarter of 2012, the storage tanks are scheduled for completion in May 2012.

"Given the price differentials that exist within the marketplace today, we view this project as an important part of our crude-by-rail strategy,” said Mark Papa, chairman and CEO of EOG Resources.

Rail is emerging as a crude oil transport solution for various shale plays, with multiple projects started in the Bakken Shale.

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