Petroleum products company Tesoro Corp. and Savage Companies, a supply chain solutions business, have formed a joint venture to develop and operate a new 120,000 barrel-per-day (bpd) crude-by-rail unloading and marine loading facility at the Port of Vancouver, Washington.
The deal is subject to approval by regulatory agencies and the port commission, but if all hurdles are cleared, the Tesoro-Savage Joint Venture would own the crude unloading and marine loading facilities and enter into a land lease agreement with the port for an initial 10-year period.
Port of Vancouver USA CEO Todd Coleman called the Tesoro-Savage joint venture “an ideal fit” for the port.
“This project aligns with our strategic goals and our mission to provide economic benefits to our community through leadership, stewardship and partnership in marine and industrial development,” he said. “The port will benefit from Tesoro’s and Savage’s shared expertise and we look forward to working with them to help support the local economy by further diversifying our cargo handling capabilities.”
Under the plan, Savage would oversee and manage the design, construction and operation of the facility on the joint venture’s behalf.
Tesoro and Savage have already operated in close partnership for almost ten years on the West Coast.
“We are pleased to be partnering again with Savage,” Tesoro President and CEO Greg Goff said in a statement. “Building upon the recent success of the rail unloading facility at our Anacortes, Wash., refinery, where we have been delivering mid-continent crude oil ... this project is the ideal next step.”
Savage President and COO Kirk Aubry said his company was looking forward to bringing crude oil destination services to the Port of Vancouver.
“This partnership solidifies Savage’s position as a leading provider of services in the crude-by-rail market to refiners, producers and marketers,” he said.
The facility, which is expected to be operational in 2014, could cost between $75 to $100 million to build according to the companies, and would be designed to handle an estimated initial volume of 120,000 bpd with potential near-term expansion capability to 280,000 bpd.