November 4, 2013
November 4, 2013
Buckeye Partners is setting up its BORCO terminal in the Bahamas to become a staging and blending center for heavy Canadian crudes, the midstream company’s top managers said Friday.
The company is in talks with Canadian crude suppliers and producers and will retrofit some BORCO storage tanks this quarter with the heating capabilities needed to handle heavy, viscous crudes, Khalid Muslih, Buckeye’s president of international pipelines and terminals, said during a quarterly earnings call.
“We’ve obviously been doing some work around this, and feel like there is an attractive opportunity to bring Canadian crude through our crude-by-rail facilities, onto the water, down to BORCO and then again to other global refining centers,” he said.
Buckeye CEO Clark Smith said on the call the company is hoping to increase blending interest at BORCO. One major US energy company already blends heavy crude from its South American production with a lighter diluent at BORCO. Buckeye did not identify the company.
“We see more opportunity to allow customers to blend product for use as refinery feedstock to refinery centers as potentially as far away as Asia,” he said.
Since 2011, the year Buckeye acquired BORCO, the company has invested more than $350 million there and added over 4.7 million barrels of incremental storage.
“The most recent phase of the BORCO expansion was completed in September adding an incremental 1.2 million barrels of crude storage at that facility,” Smith said.
Buckeye plans to invest more in BORCO “as we intend to improve the capabilities to handle heavy crude volumes sourced from South American and potentially Canada,” Smith said.
Muslih said Canadian crude would initially be sent to BORCO from the Northeast and not from the US Gulf Coast. The crude would first be shipped to Buckeye’s rail facilities along the US Eastern Seaboard, Muslih said. There, the company owns a crude-by-rail loading facility at its Albany, New York, terminal, and plans to open another at its Perth Amboy, New Jersey, terminal in the first half of 2014.