Port of Vancouver USA Petroleum by Rail Terminal June 27, 2013
Overview • Supplying the West Coast with North American Petroleum • Partnership of Tesoro and Savage • Safety and Environmental Stewardship • Tesoro Savage Petroleum Terminal • Benefit to Local Economy 1
Increasing Dependence on Foreign Supply Petroleum Supply Sources to California Refineries Foreign Sources • Saudi Arabia 27% Millions of Barrels • Ecuador 19% Foreign • Iraq 18% Alaska • Colombia 12% • Angola 5% • Others 19% California Year Source: State of California Energy Commission and U.S. EIA 2012 Data 2
West Coast Light Imports Light Crude Oil Light Crude Oil – PADD 5 Imports by Country of Origin 600 Thousand Barrels per Day 500 400 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 CANADA RUSSIA Others IRAQ VIETNAM SAUDI ARABIA Domestic shale oil production can displace 400-500K barrels per day of current light crude oil imports Source: PIRA and Tesoro Forecast 3
Market Environment • Alaska North Slope production continues to decline • U.S. shale oil production continues to increase -- projected to be over 4 million barrels per day by 2020 U.S. Shale Oil Outlook million barrels per day • Shale oil provides both price 6.0 and quality advantages versus 5.0 current sources of supply Other 4.0 Permian • U.S. West Coast has favorable 3.0 Niobrara transportation economics Eagle Ford 2.0 versus alternative destinations 1.0 Bakken 0.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: PIRA, Tesoro Forecast, and U.S. EIA 4
Domestic Production Increasing 1500 Thousand Barrels per Day 1000 500 North Dakota Oil Production 0 Source: NDIC and BENTEK Energy 5
Rail and Marine Connection to California 6
US Jobs Safely Fueling America 7
Partnership of Tesoro and Savage • Combine operational and safety strengths of each – Savage: Rail unloading and storage tanks – Tesoro: Dock and vessel loading, marine operations • Facility Overview – North American Petroleum – 2 to 4 unit trains per day (120 to 360K barrels per day) – Storage tanks load into Handymax-class vessels • Market – 19 refineries on the West Coast (CA, WA, BC, and AK) – Tesoro will provide baseload volume subscription, supplying its 5 West Coast refineries 8
Savage Spotlight • America’s Safest Companies • S 7 Delivery System • 2012 Terminal of the Year • United Way of Salt Lake Corporate Partner of the Year 9
Source: Association of American Railroads 10
Source: Association of American Railroads 11
Tesoro Spotlight • Community • Safety, Reliability, and Environment • Cost Leadership in our Markets 12
Tesoro Marine Operations Team 13
Tesoro Marine Operations • Vetting • Tankers • Tanker Operators • Marine Services • Agents • Pilots • Tugs 14
Tesoro Marine Operations (continued) • Wharf Management ‒ Marine Superintendents ‒ TPIC (Terminal Person in Charge) ‒ USCG Operations Manual • Green Flag / Green Ship • 50 Miles Offshore ‒ Marine Sanctuaries ‒ Santa Barbara Channel ‒ Straits of Magellan 15
Tesoro Response Equipment • NOFI Harbor Buster Oil Containment Boom effective in currents up to 5 knots. Can contain up to 95 barrels of oil in the separator bag. • The skimmer is an Oleophillic C-DISC 13/30. It is made of 13 coated discs that are 30 inches in diameter. This skimmer has a rated capacity of 197 barrels of oil per hour. • State of the art oil spill recovery equipment that can be used by vessels of opportunities, such as fishing boats and commercial harbor craft. 16
Alaskan Cook Inlet 17
San Francisco Bay 18
Hawaiian Islands 19
Port of Vancouver USA – Premier Gateway Images Courtesy of Port of Vancouver USA 20
Historic Industrial Use of the Terminal Site Images Courtesy of Port of Vancouver USA 21
Terminal Layout and Design Storage Tanks Marine Loading 22
Local Jobs for Vancouver, WA • Construction • Initial Operation • Full Build Out Image Courtesy of Port of Vancouver USA 23
Terminal and Construction Key Milestones 24
Port of Vancouver USA Petroleum by Rail Terminal June 27, 2013
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