Bloomberg News

Motiva to Switch Heating Oil Tanks to Diesel in New Jersey

March 09, 2012

Motiva Enterprises LLC will convert its high-sulfur diesel heating oil storage at the Sewaren terminal in New Jersey to ultra-low-sulfur diesel to accommodate new environmental regulations in New York.

Tanks for heating oil with a maximum of 2,000 parts per million sulfur will now store ultra-low-sulfur diesel of 15 ppm, a limit effective July 1 in New York. The Sewaren terminal, a delivery point for contracts traded on the New York Mercantile Exchange, will receive the less polluting fuel by ship and pipeline, according to a company statement.

“Motiva’s Sewaren Terminal is strategically located to serve distillate, gasoline and ethanol suppliers and consumers in the northeast,” Ralph Otis, the terminal’s manager, said in the e-mailed statement.

CME Group Inc. (CME) said in July that it will stop heating-oil futures contracts on Nymex beyond April 2013 and start a contract for ultra-low-sulfur diesel in response to New York’s 15-ppm standard. The contract will be used for hedging both heating oil and diesel for transportation, the Chicago-based company said at the time.

The 5-million-barrel Sewaren oil products terminal is also converting two heating oil tanks to B100 biodiesel to supply multiple blends, Motiva said. The company expects to finish the conversion to ultra-low-sulfur diesel in the second quarter of this year and finish the conversion to biodiesel in the third quarter, the statement shows.

Houston-based Motiva is a joint venture of Royal Dutch Shell Plc (RDSA) and Saudi Arabian Oil Co. Kayla Macke, a Motiva spokeswoman in Houston, declined to provide the terminal’s heating oil storage capacity, saying it is proprietary information.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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