Tesoro Corporation Announces Plans to Supply Bakken Crude Oil from North Dakota to its Anacortes, Washington Refinery

abarrelfullabarrelfull wrote on 15 Jul 2011 13:19
Tags: bakken railway refinery tesoro usa washington

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Tesoro Corporation (NYSE:TSO) today announced its intention to supply crude oil by rail from the prolific Bakken Shale/Williston Basin area in North Dakota to its refinery in Anacortes, WA. The Company currently takes delivery of one to two thousand barrels per day of Bakken crude oil into the Washington refinery. Upon completion of the project, which includes loading and unloading facilities and dedicated rail cars called a unit train, the Company expects to deliver up to 30 thousand barrels per day of Bakken crude oil into the refinery. The high quality, cost advantaged crude oil will allow the Company to decrease dependence on foreign water born feedstocks and declining Alaska North Slope production.

The Company plans to build an unloading facility to accommodate the unit train at the Anacortes refinery continuing the Company's economic contribution to the local community and the state of Washington. This new, highly efficient facility will effectively allow the Company to supply crude oil to the refinery from this "pipeline on rails". Once necessary permits are received, construction of the facility is expected to take approximately nine to 12 months to complete. The Company currently expects to spend about $50 million on this project.

Tesoro also announced today that the Company has executed a long-term agreement with Rangeland Energy, LLC for access to Rangeland's crude oil loading terminal and pipeline facility in Williams County, North Dakota. The facility, which will have a direct connection to Tesoro Logistics' High Plains crude oil gathering system, is expected to be in service by the first quarter of 2012.

"The use of a unit train to supply crude oil to the Anacortes refinery allows us to leverage our advantaged logistical position in the Bakken as well as provide a high quality, lower cost feedstock supply to the refinery," said Greg Goff, President and CEO of Tesoro. "Expanding system supply and trading activities in an effort to drive lower feedstock costs remains a strategic priority for the Company," said Goff.

Upon completion of the Anacortes Rail Facility Project Tesoro intends to offer the Facility to Tesoro Logistics LP.

Tesoro Corporation, a Fortune 150 company, is an independent refiner and marketer of petroleum products. Tesoro, through its subsidiaries, operates seven refineries in the western United States with a combined capacity of approximately 665,000 barrels per day. Tesoro's retail-marketing system includes nearly 1,200 branded retail stations, of which over 375 are company operated under the Tesoro®, Shell® and USA GasolineTM brands.

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