Tesoro Announces Plan to Sell Hawaii Operations

Tesoro Corporation today announced its plan to sell its Hawaii operations, including the 94 thousand barrel per day (mbpd) Kapolei refinery, operations at 32 retail stations and all associated logistical assets.

“Following a comprehensive analysis, we’ve determined that our business in Hawaii does not align with our strategic focus on the Mid-Continent and West Coast, and can provide greater value for a company that will invest in the business and employees,” said Greg Goff, president and CEO of Tesoro. “While the Hawaii business is no longer in line with our vision for Tesoro’s future, there is no question that it offers value for the right investor.”

The Kapolei refinery enjoys a favorable geographic position, excellent logistical infrastructure and an advantaged configuration that make it an attractive business for interested buyers. The refinery yield is distillate-focused and is complementary to the on-island demand for utility, jet and military fuels. The facility has the necessary logistics to support product movements to and from the U.S. West Coast or Pacific Rim markets, and is well positioned for participation in existing State of Hawaii and U.S. Department of Defense renewable fuels projects.

This is a fully integrated business which includes:

– Advantaged hydrocracking refinery

– Network of retail stations

– Deep draft single point mooring facility for crude and product movements

– Proprietary pipelines with connections to crucial business hubs such as Honolulu International Airport, the military fuel depot and Barbers Point inter island barge harbor

– Terminal access and barge operations to supply the major outlying islands

Tesoro Hawaii indicated its operations are focused on continuing to meet all its business commitments during the marketing and sales process.

3 Responses

  1. I have a bad feeling about this… If the refineries were viable businesses, wouldn’t Tesoro have been more likely just to spin them off as subsidiaries? We’re so vulnerable to refinery costs here that if someone comes in and cranks up the cost, there’s not much we can do…

  2. No big surprise. Here in Philadelphia 2 refineries have closed in the last 3 months. The labor costs compared to the cost of overseas refineries is so huge. Hawaii is a big organized labor state which is great for workers while they have jobs, but not too great when the company moves overseas for cheaper labor.

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