It’s been boom or bust for US East Coast refiners in recent years. While several plants shut down, others adapted their logistics to benefit from shifting supply and market dynamics. The shut downs increased surviving operators’ market share, while access to cheaper Midcontinent feedstock combined to strengthen margins and profitability in some cases.

Sheer size also helped Phillips 66’s Bayway Refinery in Linden, New Jersey, company representatives told Breaking Energy during a recent tour of the facility. One of the country’s larger refineries, at 238,000 barrels per day of total crude processing capacity, Bayway is also one of the oldest plants in the US, originally constructed in the early 1900’s by Rockefeller’s Standard Oil of New Jersey.

In addition to refining, the industrial campus situated adjacent to the New Jersey Turnpike houses a merchant co-generation GE power plant and a DuPont chemical manufacturing operation, as well as the headquarters of ExxonMobil/Shell lubricant and fuel additive joint venture Infineum. Phillips 66 also produces 11,000 b/d of polypropylene onsite.

Capacity reductions from East Coast refinery closures have done as much, if not more, to improve refining economics than gaining access to Bakken crude feedstock, said Refinery Manager David Erfert. The company had a better-than-expected first quarter, he said, with Phillips 66 earlier this month announcing Q1 earnings of $1.4 billion compared with earnings of $636 million in the first quarter of 2012.

The East Coast is the largest US gasoline market, and the company is positioning itself to supply a larger share of it with products generated from light, sweet Bakken crude. “Our five-year agreement with Global [Partners LP] assures us long-term access to advantaged crude for our Bayway refinery through what we believe is a cost competitive origin-to-destination supply system to the East Coast,” Tim Taylor, Executive Vice President, Commercial, Marketing, Transportation & Business Development said in a release.

Bayway, like most East Coast plants, was traditionally supplied with Brent-based crude from West Africa and other overseas locations. However, with Bakken crude trading at a steep discount to Brent, it’s a cheaper option for refiners who can source it, even with the estimated $14 per barrel transportation cost associated with moving it from North Dakota, company representatives said.

Bayway currently gets 80,000 to 90,000 b/d of Bakken crude by rail, said Erfert, and by mid- to late-next year the company expects to complete construction on a rail terminal that will significantly increase unloading capacity. “This will be the biggest new rail rack on the East Coast,” Erfert said.

“We would not have been able to do the rail yard project as quickly if we were still part of ConocoPhillips,” he said. “You have to be able to move quickly to capture these advantages.”

PBF Energy is one of the only other East Coast refiners currently receiving Bakken crude via rail.