Bakken Crude Reaching Lousiana Refiners by Barge

Date : 07/26/2012 @ 3:48PM
Source : Dow Jones News
Stock : Exxon Mobil Corp. (XOM)
Quote : 82.605  0.315 (0.38%) @ 10:48AM

Bakken Crude Reaching Lousiana Refiners by Barge

Kirby (NYSE:KEX)
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By Ben Lefebvre

Barge operator Kirby Corp. (KEX) said Thursday that it is shipping crude from the Bakken Shale to refiners in Louisiana through the Mississippi River.

The Houston-based company is believed to be the first barge operator to use America's most famous river as a highway for oil from the land-locked Bakken, an oil-rich area in North Dakota and Montana where production is surging faster than energy companies' ability to ship oil via pipelines. The phenomenon underscores the growing geographic reach of U.S. light, sweet crude, a bounty which has been unlocked in recent years by advanced drilling techniques.

Kirby during last weekend loaded on its barges at St. Louis a unit-train of Bakken oil that had arrived by rail. The barges take a week to travel down the Mississippi River to bring the oil to the Baton Rouge, La. area, said company spokesman Steve Holcomb.

"We've moved Canadian tar sands from St. Louis before, but this is the first time we have loaded crude oil that originated out of the Bakken," Mr. Holcomb said.

Rail cars have so far been the main mode of transport for oil out of the Bakken, where oil production reached 600,000 barrels a day in April, making the state surpass Alaska as the nation's second-largest crude producer, according to the U.S. Energy Information Administration. The region's oil output helped boost the number of rail cars used to transport crude oil and petroleum in the U.S. to 241,000, up 38% from last year, the EIA said Thursday.

Louisiana is home to 19 refineries, including major plants operated by Exxon Mobil Corp. (XOM), Phillips 66 (PSX) and Marathon Petroleum Corp. (MPC). With a combined refining capacity of about 3.2 million barrels a day, the state is the second-largest refining state in the U.S. after Texas, according to the EIA.

--Tom Fowler contributed to this article

Write to Ben Lefebvre at ben.lefebvre@dowjones.com

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