By the OGJ Online Staff
WASHINGTON, DC, May 22 -- The US Department of Energy's Strategic Petroleum Reserve office has invited oil firms to bid for the lease of its St. James terminal on the Mississippi River.
The terminal, 45 miles west of New Orleans, is in a major distribution center for oil movements to refineries in the Gulf Coast and the Midwest. DOE noted demand is increasing for storage and distribution facilities to accommodate expanding oil production from offshore developments.
It has leased the terminal to Equilon Pipeline Co. since 1997 as part of a program to make underutilized facilities in the SPR complex available for commercial crude operations.
Equilon has leased the terminal, currently known as the Equilon Sugarland terminal, for about $750,000/year.
Under terms of the lease, DOE can invite bids from other prospective lessees to attempt to obtain a more favorable deal. Equilon can match the highest offer, and if it does not, DOE will award a contract to the new bidder effective Jan. 31.
Any lessee must provide DOE pipeline and marine distribution services on a priority basis in the event a national energy emergency requires the government to move SPR crude into the market.
The terminal has two tanker docks capable of accommodating 100,000-dwt tankers and 2 million barrels of tankage. It is connected to the Capline pipeline system, the largest crude oil pipeline serving the Midwest. The facility is also tied into the LOOP and LOCAP lines linked to Gulf Coast production and refineries.
DOE asked for offers by June 29. Negotiations with companies would take place during July and August. A new award would be made by Nov. 1.
