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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. refiner Tesoro Corporation (NYSE:TSO) (San Antonio, Texas) saw its earnings cut in half last year amid a harsh market, the company reported recently. Despite the lower refining margins and weaker crude differentials of 2016, Tesoro says it expects to increase capital expenditures this year by about $250 million as it focuses on its growth strategy. Industrial Info is tracking $1.43 billion in active Tesoro projects.
The company, which owns operations primarily in the West Coast and Rocky Mountains regions, said it expects total capital expenditures of about $1.2 billion in 2017, consisting of $870 million at Tesoro and $325 million at Tesoro Logistics LP (NYSE:TLLP) (San Antonio). Turnaround expenditures for full-year 2017 are expected to be $360 million.
Last year's capital expenditures were about $948 million, consisting of $676 for Tesoro and $272 million for TLLP. Turnaround expenditures for the year were nearly $340 million.
North American refinery turnaround activity will increase this year as operators begin to catch up on maintenance schedules, according to one of the presenters at Industrial Info's 2017 Industrial Market Outlook in Houston, Texas. For related information, see February 9, 2017, article - Industrial Market Outlook: Uptick in Refinery Maintenance Turnarounds Seen for 2017.
As part of its growth strategy, Tesoro has high hopes for its proposed $150 million crude-oil, rail-to-marine terminal in the Port of Vancouver in Washington. Tesoro is developing the $150 million project in partnership with Savage Services Corporation (Midvale, Utah). The terminal will have the ability to ship 140,000 barrels of crude per day, primarily Bakken, with the possibility of expanding. The terminal will be capable of unloading 30 cars at a time. Provided it receives necessary permitting, construction could begin in mid-2017, with completion in the third quarter of 2018. For more information, see Industrial Info's project report.
Last month, Chief Executive Officer Greg Goff said that work continues to develop the Los Angeles, California, refining integration and compliance project, which includes the full integration of the Carson and Wilmington operations, with a yield flexibility of 30,000 to 40,000 barrels per day between gasoline and distillates, and a reduction in greenhouse gas and other pollutant emissions. The Carson and Wilmington operations have a combined capacity of 380,000 barrels per day.
At the Carson refinery, Industrial Info is tracking the $80 million Wet Jet Merox Treater Unit Addition project, which is part of the refinery integration and compliance project. The 50,000-barrel-per-day unit would reduce sulfur content in jet fuel. Construction kickoff is expected in mid-2017, with completion in June 2018. For related information, see Industrial Info's project report.
Also part of the integration and compliance project is the planned $75 million Sulfuric Acid Regeneration Unit Addition at the Wilmington refinery. The 400 ton-per-day unit would recycle spent sulfuric acid from both the Wilmington and Carson refineries. Construction kickoff is expected this April, with completion in May 2018. For more information, see Industrial Info's project report.
Another key growth project for Tesoro is the $400 million West Coast mixed xylene unit addition at its Anacortes Refinery in Washington. The 15,000 barrel-per-day unit would serve a large and growing market in Asia and would have a transportation cost advantage relative to the Gulf Coast, according to Tesoro. Completion is currently expected in March 2018. For more information, see Industrial Info's project report.
Tesoro reported $754 million in net earnings from continuing operations in 2016, compared with $1.54 billion in 2015. Things looked better for just the fourth quarter, with $78 million in net earnings, up from $54 million in fourth-quarter 2015.
In November, Tesoro announced an agreement to acquire Western Refining in a primarily stock transaction valued at $6.4 billion. The acquisition includes Western Refining's refineries in Texas, New Mexico and Minnesota to Tesoro's existing refineries in California, Washington, Alaska, Utah and North Dakota. Tesoro will have 10 refineries and a refining capacity of over 1.1 million barrels per day.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
The company, which owns operations primarily in the West Coast and Rocky Mountains regions, said it expects total capital expenditures of about $1.2 billion in 2017, consisting of $870 million at Tesoro and $325 million at Tesoro Logistics LP (NYSE:TLLP) (San Antonio). Turnaround expenditures for full-year 2017 are expected to be $360 million.
Last year's capital expenditures were about $948 million, consisting of $676 for Tesoro and $272 million for TLLP. Turnaround expenditures for the year were nearly $340 million.
North American refinery turnaround activity will increase this year as operators begin to catch up on maintenance schedules, according to one of the presenters at Industrial Info's 2017 Industrial Market Outlook in Houston, Texas. For related information, see February 9, 2017, article - Industrial Market Outlook: Uptick in Refinery Maintenance Turnarounds Seen for 2017.
As part of its growth strategy, Tesoro has high hopes for its proposed $150 million crude-oil, rail-to-marine terminal in the Port of Vancouver in Washington. Tesoro is developing the $150 million project in partnership with Savage Services Corporation (Midvale, Utah). The terminal will have the ability to ship 140,000 barrels of crude per day, primarily Bakken, with the possibility of expanding. The terminal will be capable of unloading 30 cars at a time. Provided it receives necessary permitting, construction could begin in mid-2017, with completion in the third quarter of 2018. For more information, see Industrial Info's project report.
Last month, Chief Executive Officer Greg Goff said that work continues to develop the Los Angeles, California, refining integration and compliance project, which includes the full integration of the Carson and Wilmington operations, with a yield flexibility of 30,000 to 40,000 barrels per day between gasoline and distillates, and a reduction in greenhouse gas and other pollutant emissions. The Carson and Wilmington operations have a combined capacity of 380,000 barrels per day.
At the Carson refinery, Industrial Info is tracking the $80 million Wet Jet Merox Treater Unit Addition project, which is part of the refinery integration and compliance project. The 50,000-barrel-per-day unit would reduce sulfur content in jet fuel. Construction kickoff is expected in mid-2017, with completion in June 2018. For related information, see Industrial Info's project report.
Also part of the integration and compliance project is the planned $75 million Sulfuric Acid Regeneration Unit Addition at the Wilmington refinery. The 400 ton-per-day unit would recycle spent sulfuric acid from both the Wilmington and Carson refineries. Construction kickoff is expected this April, with completion in May 2018. For more information, see Industrial Info's project report.
Another key growth project for Tesoro is the $400 million West Coast mixed xylene unit addition at its Anacortes Refinery in Washington. The 15,000 barrel-per-day unit would serve a large and growing market in Asia and would have a transportation cost advantage relative to the Gulf Coast, according to Tesoro. Completion is currently expected in March 2018. For more information, see Industrial Info's project report.
Tesoro reported $754 million in net earnings from continuing operations in 2016, compared with $1.54 billion in 2015. Things looked better for just the fourth quarter, with $78 million in net earnings, up from $54 million in fourth-quarter 2015.
In November, Tesoro announced an agreement to acquire Western Refining in a primarily stock transaction valued at $6.4 billion. The acquisition includes Western Refining's refineries in Texas, New Mexico and Minnesota to Tesoro's existing refineries in California, Washington, Alaska, Utah and North Dakota. Tesoro will have 10 refineries and a refining capacity of over 1.1 million barrels per day.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
