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Tesoro, Savage to build crude-by-rail shipping yard for US West Coast refiners

04.25.2013  | 

With access to rail and existing marine infrastructure, the Port of Vancouver is uniquely positioned to serve as a hub for the distribution of North American crude oil to West Coast refining centers, according to the companies. The deal is subject to approval by regulatory agencies and port commissioners.

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Tesoro and Savage Companies have formed a joint venture to develop and operate a new 120,000 bpd crude-by-rail unloading and marine loading facility at the Port of Vancouver, Washington, the companies confirmed on Thursday.

The deal is subject to approval by regulatory agencies and port commissioners.

With access to rail and existing marine infrastructure, the Port of Vancouver is uniquely positioned to serve as a hub for the distribution of North American crude oil to West Coast refining centers, according to the companies.

Tesoro and Savage say they are ideal partners for this project, having already operated in close partnership for almost 10 years on the West Coast.

"This is an exciting project, and we are pleased to be partnering again with Savage," said Greg Goff, CEO of Tesoro. "Building upon the recent success of the rail unloading facility at our Anacortes, Wash., refinery, where we have been delivering Mid-Continent crude oil via unit train in an environmentally sound and cost-effective manner, this project is the ideal next step for Tesoro as we drive additional feedstock cost advantage to the remaining refineries in our West Coast system."

The Tesoro-Savage venture will own the crude unloading and marine loading facilities and will enter into a land lease agreement with the port for an initial period of 10 years.

Savage will oversee and manage the design, construction and operation of the facility, which is expected to be operational in 2014. It will represent an investment of approximately $75 to $100 million, and will be designed to handle an estimated initial volume of 120,000 bpd with potential near-term expansion capability to 280,000 bpd.

"We are looking forward to bringing crude oil destination services to the Port of Vancouver," said Kirk Aubry, chief operating officer of Savage.

"This partnership solidifies Savage's position as a leading provider of services in the crude-by-rail market to refiners, producers and marketers," he added. "More importantly, our collaboration with Tesoro will ensure that the facility is safe, productive and environmentally responsible."



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