Delaware City Refinery owner to spin off oil terminal assets

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Rail cars last summer at the PBF unloading area at Delaware City.
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PBFDelaware City Refinery owner PBF Energy is spinning off its transportation and terminal operations into PBF  Logistics LP.

The entity announced that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission in connection with a proposed initial public offering of PBF Logistics common units representing limited partner interests.

PBF Logistics expects the common units will trade on the New York Stock Exchange under the symbol “PBFX.” The number of common units to be offered and the price range for the offering have not yet been determined. 

PBF Logistics was formed by PBF Energy to own or lease, operate, develop and acquire crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets. One of its biggest assets will be the rail unloading area  near the company’s Delaware City Refinery.

The oil unloading area is a key strategy for PBF, which ships in crude  oil via rail tank cars from the tar sands area of Canada and the Bakken zone of North Dakota. The higher cost of rail transport is offset by discounts it receives from producers  due to the lack of pipelines in the region.

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Rail safety has also become a growing concern as the crude oil passes through populated areas on its way from North Dakota and Canada.  Being debated is whether the lighter Bakken oil has more gas components than other types of crude and is hence more flammable.

Hearings have been held locally on the issue and  emergency response plans are being developed in the event that a rail disaster took place.

The  Canadian crude, which arrives in heated tank cars,  is seen a problem,  if spills take place. The heavy crude from the tar sands is more difficult to clean up.

The final leg of the trip to the refinery  passes through developments in the Bear-Glasgow area. Federal transportation officials have lowered speed limits and required other safety steps by railroads. Oil trans travel at lower-than-maximum speeds on the final trip to the refinery unloading area.

For its part, PBF is phasing out use of the oldest and least safe tank cars this month and has thousands of new cars on order.

The Delaware City  facility had come under fire from environmental critics for not complying with the Coastal Zone Act that governs industry in the refinery area. Those claims were not upheld.

Headquartered in Parsippany, N.J.,  PBF Logistics’ initial assets will consist of  the Delaware City unloading terminal  that also services the Paulsboro refinery, and a crude oil truck unloading terminal at the Toledo refinery.

Barclays Capital Inc. and UBS Securities LLC will serve as joint book-running managers in the proposed offering.

 

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