Plains All American said on Thursday it would add 1.2 million barrels of crude oil storage to its St. James, Louisiana terminal by the third quarter of 2012 after securing contracts with customers.
Plains plans to invest $50 million in the expansion, which will be its third project on the terminal since the facility came online in 2007.
The St. James terminal now stores 7.1 million barrels of crude and is equipped to receive oil shipments via rail, pipeline and barge from the nearby Mississippi River, said Roy Lamoreaux, director of investor relations at Plains.
The expansion will benefit from a similar development at a neighboring railway terminal, which will double its offloading capacity to 130,000 barrels per day in the next quarter.
Such railway shipments are expected to ease a supply glut in the Midwest, which led to a year-long and steep discount of U.S. benchmark crude against its European counterpart Brent now just above $25 a barrel.
Two railway terminals in St. James receive much of the 100,000 bpd of crude that is shipped south from oilfields such as the Bakken in North Dakota, according to industry sources. (Reuters)
