Tesoro Corp. CEO Greg Goff said Thursday that the company’s plan to rail crude oil to the Port of Vancouver USA has been delayed as the state of Washington completes an environmental impact statement.
“The permitting process is taking longer than we have originally expected,” Goff told analysts Thursday in a conference call.
But he said Tesoro expects to receive the permit and begin construction in late 2014 or early 2015, some months after the original start date.
“We expect initial volumes to begin moving to its facilities by mid-2015, and expect the full project to be completed about 12 months after construction begins,” Goff said.
Announced in April 2013, the project will include a marine loading dock at the port, and was expected to being operating at an unspecified time in 2014.
The cost of the project has risen and now is expected to range from $150 million to $190 million, up from an earlier estimate of $100 million.
The project’s cost will be split 50-50 between Tesoro and its partner, Utah-based Savage Cos.
Savage transports bulk cargo in the United States and parts of Canada.
In a note to clients, senior analyst Roger Read at Wells Fargo Securities wrote: “We have never expected completely smooth sailing” on the permitting process. “In our view, the news that the permits and construction dates may shift by a few months is built into our expectations.”
Railing crude oil into the Port of Vancouver USA would allow Tesoro to deliver lower-cost crude to refineries in its West Coast system, analysts have said.
Goff said the project’s design and engineering work is 80 percent complete.