Tesoro Logistics LP
), an affiliate of the independent refiner
) declared that it has completed part of the previously announced
West Coast Logistics Assets acquisition. (Read:
Tesoro Corp. to Sell Logistic Assets to Affiliate
The Tesoro Corp. affiliate has acquired three marketing terminals
and a storage facility for a total purchase price of $241 million,
which includes $214.4 million in cash and about $27 million as
The partnership announced that its plans to complete the remaining
portion of the $270 million acquisition - the refined products
pipeline system that connects Tesoro Corp.'s refinery in Kenai to
Anchorage - in the third quarter or at the beginning of
Tesoro Corp. and the affiliate added that the two parties are
expected to enter into throughput and usage agreements for the
terminal and storage facilities. The agreement for the terminals
includes a minimum throughput commitment while the storage
agreement requires Tesoro Corp. to pay a monthly fee for reserving
the existing shell capacity of the facility.
San Antonio, TX-based Tesoro Corp. is an independent refiner and
marketer of refined petroleum products in the western U.S. A major
advantage for the company is the scale and diversification benefits
afforded by its portfolio of six refineries. We also commend
Tesoro's solid long-term competitive position in the
supply-constrained California market.
However, with refiners being buyers of crude, an increase in
could limit their profitability. Given this factor, with the
commodity's price hovering around $105 per barrel, we expect Tesoro
Corp.'s margins to be under pressure.
In keeping with these views, Tesoro Corp. currently carries a Zacks
Rank #3 (Hold), implying that it is expected to perform in line
with the broader U.S. equity market over the next one to three
Meanwhile, one can consider better-ranked players from the oil
refining and marketing industry like
Sprague Resources LP
Ferrellgas Partners LP
). Both these stocks sport a Zacks Rank #1 (Strong Buy).
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TESORO CORP (TSO): Free Stock Analysis Report
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