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NEW ORLEANS -- From early 2003 the Golden Eagle refinery near San Francisco will produce substantially higher amounts of gasoline that can be sold into the California market, Tesoro Petroleum Corp. yesterday.
Tesoro, a San Antonio, Texas-based refining company, is awaiting regulatory approval for a $1.125 billion deal to acquire the refinery from Valero Energy Corp. Chief Executive Bruce Smith said at the Howard Weil energy conference in New Orleans that he expects the deal to close later this month or in May.
Smith said Tesoro will continue work to upgrade the plant so it can make more gasoline that conforms to the tough anti-smog specifications of the California Air Resources Board (CARB), Reuters reported.
At present the refinery makes about 65,000 to 70,000 barrels per day of this so-called CARB gasoline, and some 30,000 barrels per day of conventional gasoline that has to be exported for sale into other markets such as Nevada or the Pacific Northwest. Smith said the upgrade will raise the plant's daily output of CARB gasoline to 92,000 barrels.
CARB gasoline sells at a substantial premium to conventional gasoline.
Smith said an extensive round of maintenance work at the Golden Eagle refinery will be completed in the second quarter of 2002 and that the plant will then not require another major maintenance turnaround until 2005. Once Tesoro completes the Golden Eagle acquisition, it will have roughly doubled its oil refining capacity in the United States over the last 12 months to 558,000 barrels per day, the report said.