Tesoro a step closer to final decision on proposed railport

By Kristen Hays
HOUSTON, Nov 24 (Reuters) - A Washington state council on
Tuesday released a massive government review of Tesoro Corp (N:TSO)'s
TSO.N proposed $210 million railport, the latest milestone in
the company's hopes to build the largest oil-by-rail terminal in
the United States.
The 360,000 barrels-per-day project would move domestic and
Canadian crude via train to Washington's Port of Vancouver on
the Columbia River, where it would be transferred to vessels to
feed West Coast refineries, largely in California.
Tesoro had originally targeted late 2014 for startup, but
the lengthy state review and growing opposition in light of
multiple fiery crude train crashes since mid-2013 led to
repeated delays.
Tuesday's release of Washington's Energy Facility Site
Evaluation Council (EFSEC)'s draft environmental impact
statement on the project opened a 45-day stretch for public
comment. After that, the council will submit its final report
and recommendation to Gov. Jay Inslee, who has the final
decision on whether it will be built.
The report, which exceeds 1,000 pages including lists of
resources used to compile it, does not take a position on the
project. Instead, it examines its purpose, potential
environmental impacts and how to mitigate them, safety
considerations and other aspects.
The report said all tank railcars that move crude to the
proposed facility must meet the latest federal standards
announced earlier this year with thicker hulls, steel shields on
the front and back, and protections for valves and fittings
where crude goes in the top and drains out the bottom.
This year Tesoro received 210 so-called pressure railcars
with more reinforcements designed to contain flammable liquid
petroleum gas.
The railport as proposed can receive up to four oil trains
per day. According to Tesoro, it will receive mainly North
Dakota Bakken and diluted Canadian heavy crude. It also could
take shipments from other U.S. shale oilfields in Wyoming and
Colorado as well as waxy crude from the Uinta Basin in Utah.
The report also said that if the project is rejected, West
Coast refineries could still tap North American crude via rail
and pipelines where available as well as truck.
Global Partners LP GLP.N is expanding an oil and ethanol
railport about 50 miles west across the river in Clatskanie,
Oregon, where the state did not require such a lengthy and
detailed review to receive permits.
When finished in the third quarter next year with an
expanded Panamax-capable dock, that railport can potentially
handle up to 120,000 bpd of crude.