Tesoro strikes deal to ship delayed petroleum coke to China

May 21, 2008 02:00 AM

With the help of city officials, local refiner Tesoro has struck a deal to ship its delayed petroleum coke product from its Pittsburg port to China. Tesoro has been negotiating the past three years to sell the new product to Sinochem International, a petrochemicals subsidiary of one of China's largest integrated oil companies, company officials said.
The deal marks a number of firsts. It is the first direct sale by Tesoro to a customer in China, and it is also Sinochem's first contractual agreement negotiated directly with a US petroleum coke producer, said Mike Marcy, manager of public affairs for Tesoro's Golden Eagle Refinery.

Pittsburg officials also hope this is the first of many shipment deals for the city's deep-water port. The petroleum coke is produced at the Golden Eagle Refinery in Martinez and kept at the company's bulk terminal in Pittsburg. The first cargo of delayed petroleum coke from Pittsburg to China is expected to be loaded in mid-June, officials said.
The agreement resulted after nearly two years of discussions among Tesoro, Sinochem and Pittsburg city officials. Pittsburg acted in a supporting role in a visit with Tesoro to China earlier this month, said Brad Nail, Pittsburg's economic development director.

"We would not have been able to attract Sinochem without the active engagement of the city of Pittsburg," said Robert Sanz, vice president of business development for Tesoro. "This agreement represents a hallmark and demonstrates the ability of the city to facilitate partnering for commercial interests."
Said Nail: "Our role is to try and assist where we can. Anything we can do to support them, we want to do it."

Sanz applauded Pittsburg officials for the role they played, meeting with Sinochem representatives in Shanghai, China, and Pittsburg and assuring them of Pittsburg's ability to leverage its waterfront for international commerce. Pittsburg City Councilman Michael Kee said that the city first accompanied Tesoro to China in 2006 to give Sinochem officials some background about Pittsburg's aspirations.
"We showed that we were interested in working with them, and that it would be a great opportunity," he said. "We've had a long-standing relationship with Tesoro and are continuing to foster their relationship with Sinochem. Hopefully, we're seeing the fruits of that."
"I think they appreciated us being there; it added to the process," added City Manager Marc Grisham, who noted that in China businesses and government work together.

Petroleum coke is a by-product from the refining process. It is used in the manufacture of aluminum and specialty metals, electrodes, television screens and charcoal briquettes.
The new delayed product is more marketable and valuable than the fluid coke product Tesoro previously manufactured.

Tesoro will keep the delayed coke product in a 92-foot-tall, corrugated steel barn built by Koch Carbon along the city's shoreline. Nail said that the shipping deal would not directly bring revenue to Pittsburg but couldlead to longshoreman jobs. The deal will help stimulate the city's economy and should be a positive for seeking future port traffic, he said.
"Sinochem made it clear it is just the first of an expanded relationship. Hopefully, form a good business relationship with Tesoro," Nail said.

Source / East County Times
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