January 9, 2013 [OPIS] - Tesoro Corp. plans to stop operations at its 94,000-b/d Kapolei refinery in Hawaii during April and begin the process of converting the facility to an import, storage and distribution terminal, the company said late Tuesday.
The announcement comes about one year after the San Antonio-based company first said it would divest itself of its operations in the state, which include 32 retail stations and other assets in addition to the refinery.
Tesoro plans to maintain the existing distribution system to support marketing operations and fulfill its supply commitments while continuing to offer the terminal, distribution and retail assets for sale, the company said in a statement. Upon conversion of the refinery into a terminal, “Tesoro Hawaii believes third-party utilization of the terminal and associated logistics will facilitate ongoing supplies of refined products,” the statement said.
The company expects to report one-time charges of $1.00-$1.10 per share in the fourth quarter of 2012 related to the facility conversion, including charges for asset impairment and asset retirement obligations. Tesoro also expects to realize between $300 million and $350 million in cash by the end of 2013, driven by a reduction in working capital needs as a result of the refinery-terminal conversion.
