Tesoro Logistics amends agreement with Chevron for Northwest Products System

US-based Tesoro Logistics (TLLP) has amended the purchase agreement of Chevron Pipe Line’s Northwest Products system from $400m to $355m.

TLLP said the agreement has been amended as a result of the diesel fuel release, which occurred near Willard in Utah, US, on 18 March 2013.

Chevron Pipe Line will bear liabilities and responsibility for the Northwest Products system for a period of two years, and include remediation of the diesel fuel release site.

The Northwest Products System includes Northwest Product Pipeline and a 760-mile common carrier products pipeline, which extends from Salt Lake City, Utah to Spokane, Washington.

The common carrier pipeline is regulated by the Federal Energy Regulatory Commission (FERC).

It also includes a five-mile jet fuel pipeline to the Salt Lake City International Airport and the Northwest Terminalling Company, which consists of refined products terminals in Boise and Pocatello, Idaho and Pasco, Washington, will not be subject to FERC regulation.

The common carrier pipeline carries refined products to southern Idaho, as well as to eastern Washington.

The terminals have a total storage capacity of 1.3 million barrels, which delivers about 56,000 barrels per day on an average basis.

TLLP chairman and CEO Greg Goff said the company plans to integrate Northwest Products system assets into the firm’s system as it is in the final stages of the regulatory approval process.

"Closing this transaction will allow us to add to our portfolio of well positioned, fee-based logistics assets while significantly increasing third-party revenue," Goff added.

"We expect to invest $15m to $25m over the next two years to implement a detailed inspection program to further improve the integrity of the pipeline system."