Tesoro, Savage to jointly develop crude-by-rail facility at U.S. port in Vancouver

Tesoro Corp. and Savage Cos. yesterday announced they formed a joint venture to develop and operate a new crude-by-rail unloading and marine loading facility at the Port of Vancouver USA in Vancouver, Wash., subject to approval by regulatory agencies and port commissioners.

With access to rail and marine infrastructure, the port is uniquely positioned to serve as a hub for the distribution of North American crude oil to West Coast refining centers, Tesoro and Savage officials said in a joint statement. The port is served by BNSF Railway Co. and Union Pacific Railroad.

To be operational in 2014, the new facility is designed to initially handle 120,000 barrels of crude per day. A potential near-term expansion would boost daily capacity to 280,000 barrels.

"Building upon the recent success of the rail unloading facility at our Anacortes, Wash., refinery, where we have been delivering mid-continent crude oil via unit train … this project is the ideal next step for Tesoro as we drive additional feedstock cost advantage to the remaining refineries in our West Coast system," said Tesoro President and Chief Executive Officer Greg Goff.

The partnership solidifies Savage's position as a leading provider of services in the crude-by-rail market to refiners, producers and marketers, said Savage President and Chief Operating Officer Kirk Aubry.

The joint venture will own the crude unloading and marine loading facilities and will enter into a land lease agreement with the port for an initial period of ten years. Savage will oversee and manage the design, construction and operation of the facility on the joint venture's behalf.