) has announced that it has entered into an agreement with its
Tesoro Logistics LP
) to sell its West Coast Logistics Assets. The partnership will
acquire the terminal and pipeline assets of Tesoro Corp.'s
subsidiaries for a purchase price of $270 million, which comprises
$243 million in cash and the remainder in the form of Tesoro
The assets under sale include three refined product terminals, a
storage facility and a pipeline system. The marketing terminals are
located near the company's existing refineries at Martinez, CA;
Anacortes, WA and Kenai, AK and have an expected per day capacity
of 35,000 to 45,000 barrels. The partnership intends to increase
this throughput by another 6,000 to 7,000 barrels per day, by
adding a new rack at the Anacortes terminal.
The storage facility under sale is located near the Anacortes
refinery and has a capacity of 1.5 million barrels. The to-be-sold
pipeline system has an expected capacity of 35,000 barrels per day
and connects Tesoro Corp.'s refinery in Kenai to Anchorage.
The acquisition of the terminal and storage assets is expected to
close in the third quarter of the year. On the other hand, closure
of the pipeline asset funding is anticipated toward the end of the
third quarter or the beginning of fourth-quarter 2014.
Tesoro Corp. stated that it plans to invest the proceeds from the
sale in growth opportunities and increase value for shareholders
through share repurchases. Tesoro Corp. also mentioned that it
intends to increase distribution growth for the partnership and
realize the full potential of its logistics assets as well.
San Antonio, TX-based Tesoro Corp. is an independent refiner and
marketer of refined petroleum products in the western U.S. The
company 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 months.
Meanwhile, one can consider better-ranked players from the oil
refining and marketing industry like
Sprague Resources LP
Valero Energy Corp.
). While Sprague Resources sports a Zacks Rank #1 (Strong Buy),
Valero Energy holds a Zacks Rank #2 (Buy).
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TESORO CORP (TSO): Free Stock Analysis Report
TESORO LOGISTIC (TLLP): Free Stock Analysis
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