It’s anybody’s guess as to whether Vancouver will become home to the nation’s largest rail-to-marine oil-transfer terminal.
But an analyst with RBC Capital Markets, a global banking company, thinks the project proposed by Tesoro Corp. and Savage Companies at the Port of Vancouver has less than a 50 percent of being approved.
The May 8 research note, written by analyst Brad Heffern and focused on Tesoro, notes the petroleum refiner has said the oil terminal process is “proceeding ‘incredibly slow.’ ”
“We think the project has a <50% chance of being approved," according to Heffern, "and we no longer see it as a big needle mover given likely Bakken production declines."
In an email to The Columbian on Thursday, Jennifer Minx, a spokeswoman for Tesoro, said the company believes the oil-handling facility will win approval. “Though it’s taken much longer than initially expected, Tesoro remains committed to the (Washington state Energy Facility Site Evaluation Council) process and believes it will demonstrate the Vancouver Energy terminal can be built and operated in a safe, environmentally responsible manner while bringing economic and energy security benefits to Washington state and beyond.”
In his nine-page analysis, Heffern outlines upside and downside scenarios, and anticipates Tesoro recording a robust financial performance in the second quarter.
“We see Port of Vancouver as useful in getting more advantaged crude onto the West Coast, especially if Bakken production surprises to the upside,” Heffern wrote.
However, Heffern wrote: “We think many investors see the Port of Vancouver project as critical to improving (Tesoro’s) West Coast margins, so a lack of approval could be a meaningful negative.”
Port commissioners unanimously approved a lease with Tesoro and Savage in 2013. The proposed oil terminal is undergoing an environmental impact examination by the state Energy Facility Site Evaluation Council. The evaluation council is expected to issue a draft impact analysis in July. The public would then have an opportunity to comment on it.
Eventually, the council will make a recommendation to Washington’s governor, Jay Inslee, who may approve or deny the project, or send it back to the council for more work. The outcome may be appealed to the state Supreme Court.
