Tesoro Corporation Closes the Sale of the Anacortes Rail Unloading Facility to Tesoro Logistics

abarrelfullabarrelfull wrote on 15 Nov 2012 19:57
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Tesoro Corporation (NYSE:TSO) and Tesoro Logistics LP (NYSE:TLLP) today announced that Tesoro Corporation ("Tesoro") closed the sale of the Anacortes Rail Unloading Facility owned by Tesoro's subsidiary, Tesoro Refining and Marketing Company, to Tesoro Logistics LP (the "Partnership") for total consideration of $180 million.

"The sale of the Anacortes rail facility marks Tesoro's third sale of assets to the Partnership," said Greg Goff, Tesoro's President and Chief Executive Officer and Tesoro Logistics' Chairman and Chief Executive Officer. "This transaction highlights the ability of Tesoro to leverage TLLP in the growth and development of its logistics business, allowing us to broaden our capability to deliver price advantaged crude oil within the Tesoro refining system, while also increasing cash distributions to the Partnership's unitholders."

The facility, located near Tesoro's Anacortes, Washington refinery, consists of a four track offloading station capable of unloading 100 car unit trains and has a permitted capacity of 50,000 barrels per day.

The purchase price of $180 million included cash of $162 million and Tesoro Logistics equity valued at approximately $18 million. The cash consideration was financed from available cash. The equity consideration was based on the average daily closing price of common units for the 10 trading days prior to today, or $44.65 per unit, with 77% in the form of common units and 23% in the form of general partner units.

In connection with the closing of the transaction, Tesoro and the Partnership entered into a throughput and use agreement for the rail unloading facility assets. This agreement includes a minimum throughput commitment of 40 mbpd, annual price escalations and ten year initial contract terms. Tesoro Logistics expects that this contribution will result in an estimated $19 million of additional annual logistics EBITDA.

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