Tesoro Announces Panama Pipeline Agreement

abarrelfullabarrelfull wrote on 22 Jul 2014 12:35
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Dec 16, 2008

Tesoro Corporation ("Tesoro") (NYSE: TSO) today announced that it has entered into a throughput agreement that will allow the company to transport crude oil in a pipeline owned by Petroterminal de Panama (PTP). PTP has announced a project that will reverse the flow of its 81-mile trans-Panamanian pipeline. After the completion of the project, Tesoro has agreed to ship 107,000 barrels-per-day of crude through the pipeline under a seven-year agreement. PTP expects the pipeline reversal project to be ready for start-up during the third quarter of 2009.

The throughput agreement will allow Tesoro to economically deliver crude oils produced in Africa, the Atlantic region of South America and the North Sea to the company's five Pacific Rim waterborne refineries. "This project is consistent with our strategic goal to increase optionality around crude oil selection," said Bruce Smith, Chairman, President and CEO of Tesoro Corporation.

Tesoro leases existing tankage from PTP but PTP has also agreed to build new dedicated tanks for Tesoro on both sides of the Isthmus of Panama which are estimated to be in service by the end of the first quarter 2010. Tesoro plans to use the pipeline and tanks to blend and distribute different grades of crude oils for its own use.


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