Department of Energy

Department of Energy Awards Strategic Petroleum Reserve Lease to ExxonMobil

October 28, 2019

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WASHINGTON, D.C. – The U.S. Department of Energy’s (DOE’s) Office of Fossil Energy announced on October 16, 2019, that ExxonMobil Pipeline Company (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 to a qualified entity presenting the best value to the Department.

The new lease will be effective January 1, 2020, under a twenty-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 W. 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 and 30 miles southeast of Baton Rouge; and approximately 160 miles upstream from the mouth of the Mississippi River. The facility is comprised of 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—currently known as the Redstick 36 inche Pipeline—which operates as a crude oil common carrier, that runs 37.2 miles northwest to the DOE Bayou Choctaw facility.

“DOE’s Office of Fossil Energy looks forward to working with EMPCo as they help advance the Strategic Petroleum Reserve’s critical mission. We’re glad to continue furthering energy cooperation between the public and private sector,” said Assistant Secretary for Fossil Energy Steven Winberg.

DOE operated the St. James Facility from 1980 to 1997 (Redstick 36 inch Pipeline commenced operations in 1978). In January 1997, DOE leased the St. James Facility to Shell Pipeline Company LP for a twenty-year term, originally expiring December 2017. In May 2017, the lease was modified to extend the term for 2 years, ending December 31, 2019.

Find more information about DOE’s Strategic Petroleum Reserve HERE.

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