Businessweek

Tesoro Corporation operates as an independent petroleum refiner and marketer in the United States. Segments REFINING This segment owns and operates seven petroleum refineries located in the western United States and sells transportation fuels to various customers. The company’s refineries produce a high proportion of the transportation fuels that it sells. Its 7 refineries have a combined crude oil capacity of 675 thousand barrels per day (Mbpd). Feedstock Purchases: The company purchases crude oil and other feedstocks from domestic and foreign sources either through term agreements with renewal provisions or in the spot market. It purchases domestic crude oil produced primarily in California, North Dakota and Alaska. The company purchases foreign crude oil produced primarily in South America, Russia, and Canada. The company’s refineries process both heavy and light crude oil. Light crude oil, when refined, produces a higher proportion of high value transportation fuels, such as gasoline, diesel and jet fuel. Refined Products: The refining yield consists primarily of transportation fuels, including gasoline and gasoline blendstocks, jet fuel and diesel fuel, but may also include other products, including heavy fuel oils, liquefied petroleum gas, petroleum coke and asphalt. California Refineries Martinez Refining: The company’s 166 Mbpd Martinez refinery is located in Martinez, California on approximately 2,200 acres approximately 30 miles east of San Francisco. In 2012, it sourced crude oil for its Martinez refinery from California, South America, Russia and other foreign and domestic locations. The company also supplied the refinery with limited amounts of Bakken crude oil and intermediate feedstocks. The refinery’s major processing units include crude distillation, vacuum distillation, delayed coking, hydrocracking, naphtha reforming, hydrotreating, fluid catalytic cracking and alkylation units. The refinery produces a high proportion of transportation fuels, including cleaner-burning California Air Resources Board (CARB) gasoline and CARB diesel fuel, as well as conventional gasoline and diesel fuel. The refinery also produces heavy fuel oils, liquefied petroleum gas and petroleum coke. Logistics: The company receives crude oil through the Martinez crude oil marine terminal operated by Tesoro Logistics LP (TLLP), which is located on land leased by it near its Martinez refinery. It leases an additional marine terminal, which includes a dock and related pipelines and receives refined products from the refinery through interconnecting pipelines for delivery to third-party marine vessels. This facility provides access through the San Francisco Bay, enabling the company to ship and receive refined products and receive crude oil. The refinery can also receive or ship crude oil and refined products through a third-party marine terminal at Martinez. In addition, it receives California crude oil and ship refined products via truck and third-party pipelines while liquefied petroleum gases are transported via truck or rail. The company operates a refined products terminal at its Martinez refinery, which includes a truck loading rack with three loading bays that allows it to receive refined products through interconnecting pipelines from the refinery. Additionally, TLLP operates a leased refined products terminal in Stockton, California. The company distributes refined products through these and third-party terminals in its market areas and through purchase and exchange arrangements with other refining and marketing companies. The company also leases third-party clean product tanks with access to the San Francisco Bay. Wilmington Refining: The company’s 97 Mbpd Wilmington refinery is located in Wilmington, California on approximately 300 acres approximately 20 miles south of Los Angeles. In 2012, it sourced crude oil for its Wilmington refinery from California, as well as foreign locations. The Wilmington refinery also processes intermediate feedstocks. The refinery’s major processing units include crude distillation, vacuum distillation, delayed coking, hydrocracking, naphtha reforming, hydr