Tesoro Corp.’s chief executive officer said Thursday that the cost of building an oil transfer terminal at the Port of Vancouver could run as high as $190 million — 72 percent higher than originally estimated — and that construction is not expected to begin until late 2014 or early 2015.
Gregory J. Goff, Tesoro’s chief executive officer, president, and director, made the comments during a conference call to investors following release of the company’s first-quarter earnings. It was based on the assumption that Texas-based Tesoro and its partner, Utah-based Savage Companies, win approval for the controversial project.
The oil transfer terminal until now has had an estimated price tag of $110 million. Goff told investors that costs could now run between $150 million and $190 million, and would be split between Tesoro and Savage.
Goff did not say why the cost had risen, and he did not say the costs or delay threatened the viability of the project.
The Port of Vancouver’s spokeswoman could not be reached for comment Thursday evening.
Goff said the state’s permitting process for the facility, which began when the companies filed an application in August, “is taking longer than we have originally expected,” according to a transcript of the conference call.
He said the project is “somewhere between six to eight weeks behind schedule” while awaiting the state to come up with requirements on an Environmental Impact Statement. “But we’re actually in a good position to respond fairly quickly when that comes out,” he said.
He said Tesoro expects to receive a permit and begin construction late this year or early in 2015. Goff said the company expects to be receiving oil to the site by mid-2015. The project should be completed abut 12 months after construction begins, he said.
The project is now under the review of the Washington State Energy Site Evaluation Council, known as EFSEC. The council’s recommendation is advisory to Gov. Jay Inslee, who may accept it, reject it or send it back to the council for more work.
Goff said the Tesoro-Savage joint venture has completed 80 percent of the required design and engineering work for the facility.
The Port of Vancouver commission approved a lease in October with Tesoro-Savage involving 42 acres that is worth at least $45 million to the port over an initial 10 years. The companies want to build an oil-by-rail facility capable of handling 380,000 barrels of crude per day. The crude would be shipped by train from North Dakota’s Bakken shale formation and eventually converted into transportation fuel.
