Tesoro plans to stay on peninsula

Posted: Tuesday, February 25, 2003

With capital expenditures totaling $5.5 million in 2002, Tesoro Alaska plans to maintain its presence on the Kenai Peninsula and continue operating here for the long term.

"2002 was a challenging year for all refining and marketing companies," said Greg Henderson, the company's business manager for Alaska. "It was not where we'd like it to be."

However, he said the long-term plan is for the company to maintain the status quo on the peninsula with its refinery and marketing outlets.

Built in 1969, the Nikiski refinery draws about 60 percent of its crude oil from Cook Inlet, 35 percent from the Alaska North Slope and 5 percent from other sources, refining the crude into distillates, such as jet fuel, diesel fuel and heating oil, as well as gasoline, liquefied petroleum gas, heavy oils, bunker fuel and liquid asphalt.

Nikiski currently supplies between 30 and 40 percent of the jet fuel used at the Ted Stevens International Airport in Anchor-age. Most of the fuel travels there by pipeline, though some can be delivered by ship.

The refinery has a design capacity of 72,000 barrels a day and processed an average of 54,000 barrels a day in 2002.

Projections for Forest Oil's Osprey platform in Cook Inlet are estimated at 15,000 barrels of oil per day, and Henderson said refinery production in Nikiski would then increase by a corresponding amount.

In terms of gasoline marketing, Tesoro plans to continue its "free-fillin'" stamp offer that allows regular customers to collect Tesoro stamps for every eight gallons of gasoline purchased.

Each time eight stamps are collected, customers receive either a set dollar amount off their next gasoline purchase or airline miles on Alaska Airlines or Northwest Airlines.

"Overall, we have been pretty happy with the success of the free-fillin' program," said Henderson. "Right now, there are no plans to discontinue it."

Tesoro Alaska operates five Tesoro 2 Go stations on the Kenai Peninsula.

Two are in Soldotna, two in Kenai and one in Nikiski. The company has no plans to expand its marketing presence here.

Despite not having plans to expand the refinery or add any service stations this year, Henderson said the company "is committed to our employees and customers (on the Kenai Peninsula), and for the long term, we're staying here."

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