ExxonMobil Pipeline Co. gets Louisiana strategic reserve lease

(Courtesy U.S. Department of Energy) The Strategic Petroleum Reserve

ExxonMobil Pipeline Company, or EMPCo, has been awarded the new lease of the Strategic Petroleum Reserve’s Saint James Marine Terminal and Bayou Choctaw 36-Inch Pipeline (St. James Facility).

DOE awarded the St. James Facility lease on a competitive basis.

The new lease will take effect January 1, 2020, for a 20-year term. EMPCo will make monthly lease payments, be responsible for operations and maintenance of the facility, and provide use of the facility in support of government emergency oil drawdowns.

“This lease helps ensure the free flow of crude oil in the Gulf region so we may continue to strive for energy independence and embrace America’s energy renaissance,” said Secretary of Energy Rick Perry. “It’s a win-win for producers, refiners, consumers, and taxpayers.”

“This lease is a prime example of the private sector and government coming together to help achieve the country’s energy security mission in a collaborative manner,” said Under Secretary of Energy Mark Menezes. “Together, we will continue to maintain and secure the U.S. oil reserves.”

The St. James Facility is a crude oil marine terminal located approximately 45 miles west of New Orleans, 30 miles southeast of Baton Rouge, and approximately 160 miles upstream from the mouth of the Mississippi River. The facility comprises two marine docks on the Mississippi River and six storage tanks with a combined storage capacity of 2 million barrels. The lease also includes the Bayou Choctaw 36-inch pipeline that operates as a crude oil common carrier, running 37.2 miles northwest to the DOE Bayou Choctaw facility.

DOE operated the St. James Facility from 1980 to 1997. In January 1997, DOE leased the St. James Facility to Shell Pipeline Company LP for a 20-year term, originally expiring December 2017. In May 2017, the lease was modified to extend the term for two years, ending December 31, 2019.

Read the announcement. Get more information about the Strategic Petroleum Reserve.