A subsidiary of PBF Energy has entered into an agreement to buy 3,000 rail tank cars.
A Securities and Exchange Commission filing disclosed that PBF Rail Logistics Company entered into a $250 million secured revolving credit agreement with a group of 11 lenders, I to fund the acquisition of about 2,000 coiled and insulated crude tank cars and approximately 1,000 non-coiled and non-insulated general purpose crude tank cars. All cars will be manufactured by Trinity Industries, Inc. before December 2015.
The loan is guaranteed by the three refinery companies operated by PBF, including the Delaware City Refinery.
The loan agreement is further evidence that PBF plans to continue to ship crude oil via rail from North Dakota and Canada. The insulated cars are used to ship heavy Canadian crude from tar sands.
The National Transportation Safety Board has issued orders aimed at growing concern over safety of tank trains. Trains with the oldest generation of tank cars are limited to a maximum speed of 40 miles per hour, with the newest cars limited to 50 miles an hour. The company’s largest rail unloading area is just outside the Delaware City Refinery.
PBF has announced it will switch to the latest generation of tank cars this year.
Rail car manufacturers are facing a backlog of orders as refiners continue to prefer the flexibility of rail to more quickly ship crude oil to the East Coast and other markets.
