Washington, DC�The US Department of Energy has accepted the bids of two companies offering to store 2 million bbl of home heating oil in the northeastern US.
President Bill Clinton has ordered DOE to establish a temporary home heating oil reserve in the Northeast, and has asked Congress for legislation to make it permanent.
Morgan Stanley Capital Group Inc. will supply and store 1 million bbl at Amerada Hess Corp.'s First Reserve Terminal at Woodbridge, NJ. Transfer will be made in October to the terminal, which is on the Raritan River near Perth Amboy, NJ.
DOE said the terminal is one of several in the New York Harbor area that distribute heating oil by barge throughout New England.
Equiva Trading Co. will provide 1 million bbl of distillate for two New Haven, Conn., sites. Half will be stored at the Motiva terminal, which Equiva operates, and half at the Wyatt terminal, which Morgan Stanley Capital Group leases. Both terminals serve New England via tankers, barges, tank trucks, and pipelines.
Energy Sec. Bill Richardson said, "Locking these contacts in place, nearly 2 weeks earlier than we had planned, gives us greater assurance that the heating oil reserve will be functional in time for the coming winter heating season. We remain concerned [about distillate supplies] for the approaching winter, but we are well on our way to having some measure of energy insurance in place for Northeast consumers.�
The companies were selected in a competitive process conducted by the Defense Energy Support Center, the fuel purchasing arm of the Defense Department. Terminal operators must supply the stockpiled home heating oil to the market within 10 days, should the government order a drawdown.
DOE will pay winning bidders with crude oil from the Strategic Petroleum Reserve. DOE said terms of the low bids will be disclosed when the heating oil reserve is fully operational in October.