11.07.2016. Tesoro Corporation has agreed to sell storage and terminal assets it owns in Anchorage, Alaska following concerns of the state government.
In June, Tesoro closed on the acquisition of certain Flint Hills Alaska assets, including a 580,000 barrel storage terminal in Anchorage. However, the Alaska government was worried that, given Tesoro Corp already owns another terminal Anchorage, with 600,000 barrel, the corporation would have an effective monopoly on storage and distribution in the Anchorage area, which is the main gateway to the state of Alaska.
So to comply with a state consent order, Tesoro Corp agreed to drop down the Anchorage terminal and other assets to its midstream affiliate Tesoro Logistics LP (TLLP) for a total of US$444 million.
The assets include crude oil, feedstock and refined product storage tanks with a combined capacity of 3.5 million barrels in Kenai, with connectivity to TLLP’s Tesoro Alaska Pipeline and Nikiski products terminal and Tesoro’s Kenai Refinery, plus the refined product terminal in Anchorage, as well as another terminal in Fairbanks.
In connection with the acquisition, Tesoro and TLLP entered into storage and throughput and use agreements. The storage agreement requires Tesoro to pay a monthly fee to reserve the existing shell capacity of the dedicated storage tanks and terminalling throughput. The use agreement includes a minimum throughput commitment. In conjunction with the second closing, TLLP expects to amend the fee structure in the throughput and use agreement for its current Anchorage and Nikiski terminals to reflect current market rates and the provision of distribution scheduling and customer service functions.

11th July 2016