"Crimson Midstream LLC's San Pablo Bay Pipeline that hauls oil from the Bakersfield area to Northern California refiners is losing $2 million a month, creating "severe financial distress" for the company, Robert Waldron, CEO of Crimson's parent CorEngery Infrastructure Trust, wrote in a letter to Governor Gavin Newsom's office this week. RELATED: Last-minute bill aimed at boosting California oil production introduced The pipeline's fortunes have waned amid a "sudden and unexpected shift" of regional oil production to rival pipelines serving Los Angeles-area fuel makers, Waldron wrote. Crude pipelines are designed to pump certain quantities of oil and when volumes fall below the minimum ranges, the costs of operating them can soar."
"The Western States Petroleum Association has been warning California lawmakers since last year that dwindling Central Valley oil production risked shuttering pipelines such as the San Pablo Bay conduit. V alero Energy Corp.'s Benicia refinery and PBF Energy Inc.'s Martinez plant, which account for roughly one-fifth of the state's fuel-making capacity, are dependent on Central Valley crude for some of their supplies."
"Any interruption in San Pablo Bay Pipeline shipments would likely force Bay Area refiners to resort to more imports of ocean-borne crude, Waldron warned. Crimson is seeking a 37% increase in the fees it can charge to crude shippers, a temporary $3.75-a-barrel tariff hike, and other measures. "Unfortunately, Crimson is now facing severe financial distress," Waldron wrote. "Without near-term relief, Crimson will likely be forced to shut down the SPB Pipeline this fall.""
Crimson Midstream LLC's San Pablo Bay Pipeline is losing about $2 million per month and is in severe financial distress. Regional oil flows have shifted to rival pipelines serving Los Angeles-area refiners, lowering volumes and raising per-unit operating costs. The pipeline operator seeks a 37% fee increase, a temporary $3.75-per-barrel tariff hike, and other measures to remain viable. Benicia and Martinez refineries, representing roughly one-fifth of California's refining capacity, rely in part on Central Valley crude. A shutdown would likely force Bay Area refiners to increase imports of ocean-borne crude and could occur this fall without relief.
Read at The Mercury News
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