Tesoro plans new petrochemical feedstock project in its US West coast refining system

Tesoro Corporation plans to produce petrochemical feedstock in its U.S. West Coast refining system. The Company intends to pull together intermediate feedstock, primarily reformate, from its West Coast refining system for xylene extraction at Anacortes, Washington.

The initial investment will be to the tune of around $400 million, will recoup up to 15,000 barrels per day of mixed xylene. The mixed xylene will mainly be exported to Asia and is used to make polyester fibers and films for clothing, food packaging and beverage containers.

The project is expected to generate competitive returns similar to other strategic capital projects delivered by Tesoro in recent years. Startup of the new facilities is expected to be in 2017, subject to permitting and the approval process. A final investment decision is expected by year-end 2014.

The global xylene market is growing about 5% to 7% annually, primarily driven by demand in Asia. Tesoro is well positioned as a supplier based on existing logistics and operating cost advantages. According to Greg Goff, Tesoro’s President and CEO, this attractive diversification of Tesoro’s product mix supports their goals of enhancing their gross margin and investing in high return capital projects.

Tesoro Corporation, a Fortune 100 company, is a leading independent refiner and marketer of petroleum products, committed to operating responsibly in the communities they serve. Headquartered in San Antonio, Texas, their operations extend across 18 states. Tesoro, through its subsidiaries, operates six refineries in the western United States with a combined capacity of over 850,000 barrels per day. Tesoro’s retail-marketing system includes over 2,200 retail stations under the ARCO, Shell, Exxon, Mobil, USA Gasoline(TM) and Tesoro brands.

Tesoro Corporation formed a master limited partnership, Tesoro Logistics LP, which has a significant presence in gathering, transporting, storing and distributing the crude and other feedstocks they refine. Ownership in a logistics business which include a 35% interest in Tesoro Logistics LP and ownership of its general partner

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