Energy Department Seeks Offers for Leasing Oil Reserve Terminal

Agency Hopes to Increase Revenues from Commercial Use Of Mississippi River Facility

New Orleans, LA - The Department of Energy's Strategic Petroleum Reserve office is issuing an invitation to the oil industry for the commercial lease of its St. James Terminal on the Mississippi River.

The St. James Terminal, about 45 miles west of New Orleans, LA, is located in a major distribution center for crude oil movements to refineries in the Gulf Coast and the Midwest. With demand increasing for storage and distribution facilities to accommodate expanding crude oil production from offshore developments, the Energy Department is seeking industry interest and offers for the commercial use of the terminal.

Since 1997, the Department has leased the terminal to the Equilon Pipeline Company as part of an initiative to make underutilized facilities in the government's emergency oil storage complex available for commercial crude operations. The terminal, currently known as the Equilon Sugarland Terminal, has been operated and marketed by Equilon Pipeline Company on a year-to-year basis, generating approximately $750,000 in revenues to the government last year.

Under terms of the lease, the Energy Department can routinely invite bids from other prospective lessees to see if it can obtain a more favorable deal for the terminal's lease. Equilon has the right to match the highest offer. Should it choose not to, the Department will award a contract to the new offeror to take effect when the annual Equilon contract expires on January 31, 2002.

One provision for the terminal's lease is that the lessee is required to provide pipeline and marine distribution services on a priority basis in the event a national energy emergency requires the government to move crude oil from its strategic stocks into the market.

The St James terminal has two tanker docks capable of accommodating tankers of up to 100,000 deadweight tons, and two million barrels of tank capacity. It is connected to the Capline system, the largest crude oil pipeline serving the Midwest. The facility is also tied into the LOOP and LOCAP facilities which link the terminal to Gulf Coast production and refineries.

The department has asked for offers by June 29. Negotiations with companies submitting the best offers will take place during July and August. If a new award is made, it would be done by November 1, 2001, to provide the required 90 day advance notice of termination to the current leaseholder.

-End of Techline-

For more information, contact:
Mrs. Patricia C. Sigur, Realty Officer, DOE Strategic Petroleum Reserve Project Management Office, (504) 734-4347