Refiner Tesoro in pact to use Panama oil pipeline
(Reuters) - Crude oil refiner Tesoro Corp (TSO.N: Quote, Profile, Research, Stock Buzz) said on Tuesday it has signed an agreement with Petroterminal de Panama (PTP), allowing it to transport crude oil from Europe, Africa and the Atlantic region through Panama to its Pacific refineries.
Tesoro will ship 107,000 barrels-per-day of crude through the pipeline under a seven-year agreement, the San Antonio, Texas-based company said.
PTP has announced it is reversing the flow of its 81-mile trans-Panamanian pipeline, which is expected to be ready for startup during the third quarter of 2009.
Once that is completed, the throughput agreement will allow Tesoro to deliver crude oils produced in Africa, the Atlantic region of South America and the North Sea to the company's five Pacific Rim waterborne refineries.
Tesoro leases existing tankage from PTP but PTP has also agreed to build new dedicated tanks for Tesoro on both sides of the Isthmus of Panama which are estimated to be in service by the end of the first quarter 2010. Tesoro plans to use the pipeline and tanks to blend and distribute different grades of crude oils for its own use.
Tesoro's stock was 3.8 percent higher at $9.55 in early trading on the New York Stock Exchange.
