Phillips 66, Global Partners Sign Long-Term Logistics Contract
HOUSTON -- Phillips 66 signed a five-year contract with Global Partners LP whereby the latter will use its rail transloading, logistics and transportation system to deliver crude oil from the Bakken region of North Dakota to the Phillips 66 Bayway refinery in New Jersey.
The terms of the contract include a “take-or-pay” commitment from Phillips 66 to receive approximately 91 million barrels of crude oil over the contract term, which equates to approximately 50,000 barrels per day.
“Global has established a ‘virtual pipeline’ for the reliable transportation of Bakken crude,” said Tim Taylor, executive vice president, Commercial, Marketing, Transportation & Business Development for Phillips 66. “Our five-year agreement with Global [Partners] assures us long-term access to advantaged crude for our Bayway refinery through what we believe is a cost competitive origin-to-destination supply system to the East Coast.”
The contract will utilize Global’s network of loading facilities and offloading terminals. According to Phillips 66, it is one of the first energy companies to move shale crude to the East Coast. Last year, the company expanded its capability to deliver shale crude to its refineries by truck, rail, barge, ocean-going vessels, and pipelines.
“We are proud to partner with one of the world’s leading independent downstream energy companies,” said Eric Slifka, president and CEO of Global Partners. “Phillips 66 and its predecessor have been long-standing strategic business partners with Global for more than 15 years in the refined products market.”
Houston-based Phillips 66 is a downstream energy company with refining and marketing, midstream and chemicals businesses. The company, spun off from ConocoPhillips last year, also leases its Phillips 66 and 76 brand names to thousands of U.S. convenience stores.
Waltham, Mass.-based Global Partners LP engages in the wholesale and commercial distribution of refined petroleum products, renewable fuels, and natural gas and crude oil. It also has a portfolio of approximately 800 owned, leased or supplied gas stations.