* Co's N. Calif. refinery increasing crude by rail shipments
* Tesoro Washington state rail-to-barge project on track
* Utah refinery expansion on target to wrap up in late 2014
By Kristen Hays and Erwin Seba
HOUSTON, Sept 11 (Reuters) - Independent refiner Tesoro Corp was delivering the first unit train of North DakotaBakken crude to its northern California refinery on Wednesday,Chief Executive Officer Greg Goff told analysts at an energyconference.
Goff said at the Barclays Energy-Power Conference in NewYork that the delivery was part of Tesoro's efforts to increaseprocessing of cheaper inland U.S. crude in place of moreexpensive imports and Alaskan crudes.
The 166,000 barrel-per-day (bpd) Golden Eagle refinery inMartinez, California, had been receiving about 5,000 bpd ofBakken crude on mixed-freight trains. Goff said Wednesday'sdelivery would be the first so-called unit train, or one thatcarries only crude oil.
West Coast refiners, isolated from other markets by theRocky Mountains and a lack of pipelines moving crude west, areincreasingly turning to rail to access cheaper crudes morereadily available to peers in other markets.
A year ago, Tesoro started up a 50,000 bpd crude offloadingsystem at its 120,000 bpd Anacortes, Washington, refinery. Otherrefiners in the state, including BP Plc and Phillips 66, are building infrastructure to do the same.
Tesoro also aims to build a joint-venture $100 millionrail-to-barge oil terminal at the Port of Vancouver inWashington state that will receive North American crudes by railand then move waterborne shipments to California and Alaska. Thefacility is on track to have new tanks built by the end of 2014,Goff said on Wednesday.
Goff said Canadian heavy crude, even cheaper than U.S.crudes, can reach the port two ways: via rail directly fromCanada, or from Canada to Wyoming by pipeline and then via railto Vancouver.
The port project "has opened up a significant opportunity tochange the crude dynamics on the West Coast," Goff said.
Regarding its refineries, Goff said Tesoro was on scheduleto finish by the end of 2014 the second phase of a $275 millionproject to expand the crude slate that its 58,000 bpd Salt LakeCity refinery can process.
Once completed, the refinery will be able process up to22,000 bpd of cheaper waxy crude oil produced in Utah, and theplant's total throughput capacity will rise by 4,000 bpd. Theproject is expected to add $100 million to Tesoro's bottom line,Goff said.
He also said Tesoro is in the final stages of selling its94,000 bpd Kapolei, Hawaii, refinery to Par Petroleum Corp in a$300 million deal that includes retail stations, a logisticsnetwork and oil inventory.
BP (BP.)
