Anacortes refinery plans to build rail facility to handle N. Dakota crude oil

BP Cherry Point Refinery building rail loop

SKAGIT VALLEY HERALDSeptember 12, 2013 

— MOUNT VERNON - Shell is moving forward with a proposal to build a rail offloading facility for Bakken crude at its Anacortes refinery.

Company representatives met with local, state and federal regulatory agencies and tribal representatives on Aug. 26, when initial plans for construction were discussed and feedback on required and possible permits and design considerations were provided to Shell, said Thomas Rizzo, general manager for the refinery.

Rizzo said Shell needs the offloading facility to accept 100-car trains carrying roughly 60,000 barrels of crude oil from North Dakota's Bakken formation. He said the facility will be designed to handle up to one train in and out per day.

Shell has no plans for the rail facility to add capacity to the 145,000 barrel-per-day refinery, but Rizzo said less crude oil will be coming from two current sources: Alaska's North Slope via tanker and to a lesser extent, Canada by pipeline.

The company plans to file a formal application by early November, and the public will have an opportunity to comment on plans during the permit process.

Tesoro's Anacortes oil refinery was the first in the region to accept Bakken crude. The facility there can fill 50,000 barrels of the refinery’s 120,000 barrel-per-day capacity, said Dan Cameron, manager of the Tesoro refinery.

The Bellingham Herald reported in June that the BP Cherry Point Refinery had started construction on a two-mile rail loop for offloading Bakken crude, while the Phillips 66 Ferndale Refinery hopes to begin construction on an offloading facility before year's end.

Preliminary designs submitted by Shell before the meeting show a rail spur and parallel-track offloading facility stretching approximately 5,500 feet from the Burlington Northern Santa Fe main line near Highway 20 northwest to North Texas Road, just east of the refinery.

The design is different from one proposed by Rizzo in March, when he said a loop design would be considered for the facility. The parallel track will be similar to that of Tesoro's Anacortes offload facility, where the trains are split into segments for offloading, then reunited to exit, Rizzo said.

Although the loop design would be cheaper to build and operate, the parallel track design has a smaller footprint and lighter impact on wetlands located in the proposed project area, he said.

Shell's land is under county jurisdiction, but is in the city’s urban growth area and zoned for heavy manufacturing.

Along with a wetland mitigation permit from the U.S. Army Corps of Engineers, 15 other permits or approvals will be needed from state and local agencies before construction can begin, Rizzo said.

Brandon Black, senior planner for Skagit County Planning, said shoreline development permits will be needed from the county, and said a State Environmental Policy Act review may be required.

A special-use permit will be required if the company follows through with plans to mitigate impact to wetlands by restoring them in a different location off-site, said Leah Forbes, senior planner for the agency.

Forbes said the company is considering restoring wetlands to agriculture and natural resource land located just north of Highway 20 in Mount Vernon, west of Interstate 5.

"We really appreciated their input, and I think it will lead to a more robust permit application," Rizzo said of Shell's discussion with regulating agencies.

Reporter Mark Stayton: 360-416-2112, Twitter @Mark—SVH, mstayton@skagitpublishing.com, facebook.com/byMarkStayton

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