Plantations International News
US-based logistics frim Global Partners LP has cut 70 jobs and aims to handle only ethanol, not crude, at its rail terminal in Oregon in response to low oil prices.
The company, which owns one of the largest terminal networks of petroleum products and renewable fuels in the north east of the US, also cut its distribution for the October-December period by 33.7% compared to the previous quarter, and is evaluating all its businesses for possible disposition or reconfiguration.
In a statement, Global Partners’ CEO, Eric Slifka, said: “We continue to be negatively impacted by fixed costs associated with our crude oil business, including railcar leases.
“As a result, in the first quarter we have implemented a number of initiatives to reduce expenses and manage our cash flow.”
Global Partners has been expanding its railport and terminal at the Port of St. Helens in Clatskanie, Oregon, to increase storage, handle Panamax-sized vessels and increase crude offloading capability to up to 120,000 barrels per day.
That project is expected to be finished in the third quarter this year. The company held a meeting for analysts at the terminal in November 2014, touting that $ 100m project.
However, the drop in oil prices has narrowed discounts of North American crudes to global crudes, eroding rail transport profitability.
Slifka said the firm was “taking steps” to use the Oregon terminal for ethanol transloading “during this period of headwinds in the crude market.” The terminal houses an ethanol plant.
The company cut 70 jobs, about 8% of its work force excluding convenience store workers. Jobs were cut at the Oregon terminal as well as the company’s crude loading terminals in North Dakota and its corporate offices.
“”While any workforce reduction is difficult, we believe these actions are necessary to work through this challenging crude market,” Slifka said.
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