Tesoro Shutters Hawaii Refinery
California Gasoline Taxes To Rise July 1
HollyFrontier, Holly Energy To Add New Mexico Rail Facility
CH4 Opens Alternative Fuel Station in Salt Lake City
Kinder Morgan Considers New Pipeline to California

TESORO SHUTTERS HAWAII REFINERY

KAPOLEI, HI. — As scheduled, Tesoro Corporation has shut down operations at its Hawaii refinery on April 30.

In February 2012, Tesoro officials had announced plans to sell all of their Hawaii operations, including its Kapolei refinery, 32 retail stations, and all assets related to those operations.

"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," stated Greg Goff, president and CEO of Tesoro, explaining the company's position. "The Hawaii business is no longer in line with our vision for Tesoro's future."

When no buyer came forward, Tesoro announced on January 18 that it would quit refining operations at the Hawaii facility and convert it to to an import, storage and distribution terminal.

According to an official statement, "Tesoro Hawaii will maintain the existing distribution system to support marketing operations and fulfill its supply commitments while continuing to offer the assets for sale."

Tesoro had been a major supplier to the Hawaii market for many years. The company's Kapolei refinery had been the largest refinery in Hawaii and its pipeline supplied terminals at the Honolulu International Airport, the Honolulu Harbor, and for the United States military services.

Prior to the closure of the refinery, Tesoro reported had approximately 550 employees in the Hawaiian Islands. The company operates service stations in Kailua, Kihei, Honolulu, Hilo, Kahului, Haleiwa, Kealakekua, Waiane, Kapolei, Ewa Beach, Pearl City, Waipahu, Mililani, and Aiea.

CALIFORNIA GASOLINE TAXES TO RISE JULY 1

SACRAMENTO, CA. — The state of California has raised its excise tax levied on gasoline in California by 3.5 cents per gallon, effective July 1, making the state taxes 39.5 cents per gallon.

The excise tax, which is paid at the rack, was increased by a vote of the California Board of Equalization.

The state of California also charges sales tax on gasoline sales and sales tax will be charged to customers on the additional state excise taxes. With street gasoline prices around $4.00 per gallon, California consumers will be paying approximately $1.00 per gallon in taxes with the new tax hike.

"The Board is sensitive to the financial impact consumers are feeling at the pump," said the Board of Equalization in an official statement, "but state law requires the BOE to adjust the excise tax by March 1 of each year in order to ensure revenue neutrality."

HOLLYFRONTIER, HOLLY ENERGY TO ADD NEW MEXICO RAIL FACILITY

DALLAS, TX. — HollyFrontier Corporation and Holly Energy Partners, L.P. have announced plans to construct a rail facility that will enable crude oil loading and unloading near HollyFrontier's Artesia and Lovington, New Mexico refineries.

The company said the rail project will have an initial capacity of up to 70,000 barrels per day and will enable access to a variety of crude oil types. It will be connected to the Holly Energy pipeline system in southeastern New Mexico.

The rail facility is expected to be completed "by early 2014."

HollyFrontier markets its refined products principally in the Southwest, Rocky Mountains, Pacific Northwest, and in neighboring Plains states.

CH4 OPENS ALTERNATIVE FUEL STATION IN SLC

SALT LAKE CITY, UT. — CH4 Energy Corporation has opened a new fueling station which will market LNG and CNG as part of the Pilot Flying J travel plaza in Salt Lake City, UT. The station, located at the intersection of Interstates 80 and 15, is the first LNG station open to the public in the state of Utah.

Construction began on the site in January and CH4 Energy says it will dispense CNG and LNG "faster than any public natural gas fueling station in North America."

The service station will accept fleet fueling cards, major credit cards, and the Utah State fleet fueling card and customers will have access to the amenities of the Pilot Flying J including truck parking, the driver's lounge, showers, restaurants, and DEF dispensing.

The fueling station is partially funded by a Department of Energy/Recovery Act grant administered by the Utah Clean Cities Coalition.

"This station will be the premier public natural gas fueling station in North America and will be a great asset to the State of Utah, which is leading North America in the deployment of vehicles using clean, domestically produced natural gas," said CH4 Energy CEO Merritt Norton, announcing the opening of the facility. "Utah is the only state in the country where a significant proportion of average citizens drive natural gas vehicles, and this station — which is strategically located at the crossroads of the West at the intersection of Interstate 80 and Interstate 15, as well as the major highway, Utah Highway 201 — will provide public access to the fastest and most convenient fill up in North America from both CNG and LNG natural gas vehicles."

KINDER MORGAN CONSIDERS NEW PIPELINE TO CALIFORNIA

ORANGE, CA. — Kinder Morgan Energy Partners is looking for industry feedback to determine if the company should develop a new pipeline to serve the refining complexes of northern and southern California.

The proposed pipeline, which would be operated by Kinder Morgan Freedom Pipeline LLC, would transport crude oil from the Wink-Midland, TX., areas into the existing California crude pipelines and, from there, to the San Francisco Bay area and the Los Angeles area refineries. The proposed initial capacity for the line would be 277,000 barrels per day.

The pipeline would be constructed by converting approximately 740 miles of existing natural gas pipeline to move crude oil as well as the addition of new crude pipeline in California and Texas as well as pumping stations. Kinder Morgan would also add additional tank storage in Midland and Wink as well as at the points of delivery within the state of California.

If the project goes forward with industry support and regulatory approval, Kinder Morgan officials predict crude shipments on the pipeline could begin by the end of 2016.

Originally published in the June 2013 issue of O&A Marketing News.
Copyright 2013 by KAL Publications Inc.