US refiner Tesoro will drop $270mn in west coast storage, terminal and pipeline assets into its transportation master limited partnership (MLP).
Tesoro Logistics, the transportation-focused MLP spun off from Tesoro, will acquire a marine crude and heavy products storage facility with 1.5mn bl of storage adjacent to Tesoro's 120,000 b/d refinery in Anacortes, Washington, and a 70-mile long refined products pipeline system connecting Tesoro's TKTK b/d refinery in Kenai to Anchorage, Alaska. The pipeline has an expected average throughput of 35,000 b/d.
The MLP will also acquire three refined products terminals adjacent to Tesoro's 168,000 b/d refinery at Martinez, California, 120,000 b/d refinery in Anacortes, and 72,000 b/d refinery in Kenai, Alaska. The terminals have an expected total throughput of 35,000-45,000 b/d. It plans to develop a new truck rack at the Anacortes terminal, adding 6,000-7,000 b/d of throughput.
The MLP is vehicle that has become favored for midstream assets, and Tesoro is among a handful of US refiners developing those midstream businesses. Stocks of the entities are traded publicly, but the MLPs pay a dividend and enjoy the tax advantages of a partnership.
Separately, midstream company SemGroup has sold its remaining one-third interest in SemGroup pipeline to its MLP Rose Rock Midstream for $300mn. The deal gives Rock Rock a 100pc interest in SemGroup Pipeline, which has a 51pc stake in the 76,000 b/d White Cliffs pipeline from Colorado to Cushing, Oklahoma.
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