Tesoro plans refinery upgrade

Tesoro Corp. says it plans to spend $400 million to produce petrochemical feedstocks in its West coast refineries for extraction at their March Point refinery here.

The project, which will involve gathering intermediate feedstock, primarily reformate, from its West Coast refining system, is designed to enable the Anacortes plant to recover up to 15,000 barrels per day of mixed xylene, Tesoro said in a news release.

The global xylene market is growing about 5% to 7% annually, primarily driven by demand in Asia. Tesoro is well positioned as a supplier based on existing logistics and operating cost advantages.

"This attractive diversification of Tesoro's product mix supports our goals of enhancing our gross margin and investing in high return capital projects", said Greg Goff, Tesoro's President and Chief Executive Officer.

The project is expected to generate competitive returns similar to other strategic capital projects delivered by Tesoro in recent years. Startup of the new facilities is expected to be in 2017, subject to permitting and the approval process. A final investment decision is expected by the end of this year.

Tesoro also oprates refineries in Kenai, Alaska, and Martinez and Los Angeles, Calif.