California Resources Corporation filed an application with the California Public Utilities Commission seeking approval to acquire control of the San Pablo Bay Pipeline and Crimson California Pipeline, two major crude oil pipeline systems serving California refineries.
On June 16, California Resources Corporation, through its subsidiary CMH Acquisition Company, and CorEnergy Infrastructure Trust, the parent company of Crimson Midstream, filed a joint application with the CPUC seeking approval to transfer control of Crimson Utilities, a pipeline network that includes the San Pablo Bay Pipeline and Southern California Pipeline systems.
The 265-mile San Pablo Bay pipeline has historically moved crude oil produced in Kern County to refineries near San Francisco, including PBF Energy's 157,000 b/d Martinez refinery and Valero Energy's Benicia plant. San Pablo Bay connects to Crimson's KLM pipeline, which consists of approximately 135 miles of active pipeline connecting points in San Joaquin Valley production areas. The company also operates a network of crude oil pipelines that moves Los Angeles Basin crude oil from Ventura and Orange counties to refineries in the SoCal region.
The two pipelines play a pivotal role in California's economy, the application said.
CRC is the state's largest independent oil producer, with an average net production of 138,000 b/d and oil reserves holding roughly 654 million bbl. The companies requested an expedited authorization of the sale, which would require a 10-day response period since notice of the application is filed.
Once the transaction is finalized, CRC intends to "continue operating the pipelines in the same manner as they are operated today" and current shippers on the lines "should not expect any disruption in service," the company said in a statement to OPIS this week.
"Investing in critical pipeline infrastructure helps ensure California-produced energy is transported safely and reliably, strengthening energy security and supporting affordability for Californians," the company added.
According to the application, the company would own and control Crimson Utilities, but is expected to retain operational staff and refinery workforce, as Crimson Utilities staff continues to operate and maintain its regulated assets.
Crimson, under its parent company CorEnergy, has produced revenues that were "insufficient to recover their costs of operation and ensure long-term viability," the application states, leaving the company in financial distress that required a sale for ensuring safe and reliable operations. It added that the pipeline operator decided to conduct a deal with CRC due to its "broad financial resources based on a diverse portfolio of proven assets, and a proven commitment to public health, safety, and sustainability."
Financial challenges for the pipeline operator have been a consistent feature since September 8, 2025. CorEnergy President Robert Waldron penned a letter to California Governor Gavin Newsom requesting a pipeline tariff rate increase to soothe the company's losses of $2 million each month from low operation rates, OPIS previously reported.
In March, Waldron told OPIS that his 45,000 b/d San Pablo Bay pipeline had been posting zero output volumes since the second half of 2025 after PBF Energy's Martinez refinery experienced a major fire and Valero Energy began closing its Benicia plant. Waldron said the company has since "burned cash" keeping the pipeline alive, while sustaining its pipeline infrastructure from Ventura County to Orange County in Southern California.
The company has received a few rate pipeline tariff rate increases from the CPUC, according to utilities commission documents, which increased rates to $1.9566/bbl in September 2022 and then by the same amount in March 2023.
For CRC, the application said the proposed transaction was strategically and operationally significant, allowing both pipelines to remain operational and reliable for producers, shippers and refiners trusting the Crimson Utilities infrastructure.
"CRC is prepared to commit financial resources, operational expertise, and management attention to maintain and extend the viability of the Crimson Utilities and their pipelines beyond that which would be expected under current conditions," the companies said in the application.
A pre-hearing for the application was held on July 6, where the schedule and scope of the application was discussed according to a CPUC filing.
Refiners in the state have also taken particular interest in the potential sale of the pipeline system. Chevron and Valero Energy filed for a motion for party status on June 30, a formal request to be part of CPUC hearings regarding the acquisition.
"Chevron has a substantial economic interest in this proceeding as its outcome has the potential to affect the rates charged to Chevron, as well as any potential refund payments resulting from the outcome of those cases," Chevron said in its June 30 motion. "Further, given the substantial quantities of crude oil line fill owned by Chevron but currently being held by the subject carrier,
Chevron's substantial economic interest extends to how this potential transaction impacts the return of its line fill volumes."
Chevron iterated that it does not object to the sale. However, it requested to become involved parties so that it can "ensure that the proposed transaction will not jeopardize or otherwise adversely impact Chevron's interests in the pending and ongoing rate proceedings."
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
Reporting by Shaheer Naveed, snaveed@opisnet.com; Editing by Sydnee Novak, sbeach@opisnet.com
(END) Dow Jones Newswires
July 10, 2026 09:52 ET (13:52 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
