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Independent refiner, Tesoro Corp. (TSO - Analyst Report) has announced that it has entered into an agreement with its affiliate Tesoro Logistics LP (TLLP - Snapshot Report) to sell its West Coast Logistics Assets. The partnership will acquire the terminal and pipeline assets of Tesoro Corp.’s subsidiaries for a purchase price of $270 million, which comprises $243 million in cash and the remainder in the form of Tesoro Logistics equity.

The assets under sale include three refined product terminals, a storage facility and a pipeline system. The marketing terminals are located near the company’s existing refineries at Martinez, CA; Anacortes, WA and Kenai, AK and have an expected per day capacity of 35,000 to 45,000 barrels. The partnership intends to increase this throughput by another 6,000 to 7,000 barrels per day, by adding a new rack at the Anacortes terminal.

The storage facility under sale is located near the Anacortes refinery and has a capacity of 1.5 million barrels. The to-be-sold pipeline system has an expected capacity of 35,000 barrels per day and connects Tesoro Corp.’s refinery in Kenai to Anchorage.

The acquisition of the terminal and storage assets is expected to close in the third quarter of the year. On the other hand, closure of the pipeline asset funding is anticipated toward the end of the third quarter or the beginning of fourth-quarter 2014.  

Tesoro Corp. stated that it plans to invest the proceeds from the sale in growth opportunities and increase value for shareholders through share repurchases. Tesoro Corp. also mentioned that it intends to increase distribution growth for the partnership and realize the full potential of its logistics assets as well.  

San Antonio, TX-based Tesoro Corp. is an independent refiner and marketer of refined petroleum products in the western U.S. The company currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider better-ranked players from the oil refining and marketing industry like Sprague Resources LP (SRLP - Snapshot Report) and Valero Energy Corp. (VLO - Analyst Report). While Sprague Resources sports a Zacks Rank #1 (Strong Buy), Valero Energy holds a Zacks Rank #2 (Buy).