Serving The Bakken And Beyond

Dakota Access Pipeline Will “Tighten Up” Differentials

Crude oil price differentials will “tighten up” as Bakken crude oil starts moving through the Dakota Access Pipeline, the top executive for Tesoro Petroleum said.

Other producers have said the differentials on Dakota Access would be about $3.50 a barrel.

“We believe that the differentials will stay relatively tight like that,” said Tesoro president and CEO Greg Goff, “and that we’ll need additional production to move back up to get closer to a discount what’s probably more reflective of the cost of moving Bakken out of there to the Gulf Coast from a discount basis.”

Tesoro operates refineries in Mandan and Dickinson, ND.

Speaking to Wall Street stock analysts at the beginning of May, Goff disclosed the company had closed on the $705 million acquisition of the North Dakota gathering system which includes 650 miles of crude oil pipelines, as well as natural gas and produced water lines. The acquisition includes a crude oil rail loading and storage terminal at Fryburg.

According to Goff, the gathering system should produce $65 million in annual net earnings and revenues of $100 million this year.