Tesoro to turn its logistics business into a Master Limited Partnership

Tesoro Corporation announced today its intention to contribute a portion of its logistics assets to a Master Limited Partnership (MLP) and sell a minority interest in the MLP in an initial public offering. The MLP is intended to support Tesoro's strategy to grow its logistics business.

The Partnership will own:

• Tesoro's High Plains crude oil gathering system in the Bakken Shale/Williston basin area of North Dakota and Montana.
• Eight refined products terminals located in the midwestern and western United States.
• A crude oil and refined products storage facility and five related short-haul pipelines in Salt Lake City, Utah.

Tesoro expects the offering to raise approximately US$ 200 million of gross cash proceeds.

In separating its logistic assets from its refining business, Tesoro is following in the wake of other small independent refiners in the US. Sunoco Inc. and Valero Energy Corp. has also undertaken a similar separation with great success. By separating the refinery business and the logistics business, companies can receive tax benefits and quarterly yields, similar to a dividend. This is because logistics partnership shares have been outperforming refinery shares by a large margin over the last five years.

Read the article online at: https://www.worldpipelines.com/business-news/14122010/tesoro_to_turn_its_logistics_business_into_a_master_limited_partnership/