The U.S. Department of Energy has chosen Texaco Pipeline Inc. and Unocal Corp. to help it expand its Strategic Petroleum Reserve (SPR) distribution capability.

Proposals by the two companies would allow DOE to boost its SPR crude oil drawdown rate by 400,000 b/d, bringing it to within 200,000 b/d of its goal of being able to distribute as much as 4.5 million b/d from the SPR during energy supply disruptions.

Currently, DOE can move as much as 3.5 million b/d from the SPR to commercial buyers. Development of the Big Hill SPR site near Beaumont, Tex., will boost that total to 3.9 million b/d with no new pipeline or terminal expansions.

DOE has begun talks with Texaco and Unocal on anticipated 20 year distribution service contracts that may be awarded this fall.

WHAT'S PROPOSED

Texaco proposed making an existing pipeline available to DOE, allowing shipments of at least 200,000 b/d from the Big Hill site to refineries in the Houston area and the Midcontinent. The name of the pipeline was not disclosed.

Unocal would make its marine terminal on the Neches River at Nederland, Tex., also near Big Hill, available to the government. It would provide 200,000 b/d of tanker loading capability.

DOE would finance hookups between the SPR and the Texaco and Unocal facilities, pay an annual maintenance fee, and pay additional fees if the facilities were ever used.

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DOE MOVES TO EXPAND SPR SYSTEM

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