Connolly crude gathering pipeline system
Tesoro operates a refinery in the Bakken and receives up to 50,000 barrels per day of Bakken crude via rail at its Washington State refinery.
The company also is expanding its Connolly crude gathering pipeline system in western North Dakota. In addition, Tesoro’s logistics affiliate is entering the natural gas gathering and processing business with its $2.5 billion acquisition of QEP Field Services, which includes another small crude gathering system in North Dakota.
Goff said it was “way too early” to say whether the QEP deal, announced last week, will lead to Tesoro exporting NGLs such as propane and butane from the U.S. West Coast.
Although the deal exemplifies Tesoro’s intent to beef up its logistics business, he said the company still expects growth in its refining and marketing divisions.
Tesoro also remains focused on areas where the company already operates – the Midwest, Rockies and West Coast – rather than the U.S. Gulf Coast and East Coast regions, he said.
Goff told analysts in a conference call on Friday that Tesoro has applied for permits to integrate its two Los Angeles-area refineries, improve flexibility of gasoline and diesel yields and cut emissions. If approved, the project would wrap up in 2017.
The Los Angeles system also will start receiving Canadian heavy crude in the current quarter when Plains All American starts up its 70,000-bpd crude-by-rail offloading system in Bakersfield, California, Goff said. The crude will reach Wyoming via pipeline, go to Bakersfield via rail and then arrive at the refinery via pipeline.