With refinery closed, tankers abound - Hawaii News Now - KGMB and KHNL

With refinery closed, tankers abound

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HONOLULU (HawaiiNewsNow) -

Hawaii harbors will be busier now that the Tesoro refinery is closing, because the company is bringing refined products in lieu of the that was once offloaded from offshore.

Two tankers were here last week. On Friday night a third arrived from China. And two more are on the way from the U.S. mainland and the Netherlands.

Tesoro Corp. is still looking for a buyer for the Kapolei refinery, the larger of two in the state, but Platt's Oilgram reports that it is extremely likely that a buyer will resume local refining, and adds that one prospective buyer briefly considering dismantling the refinery to ship the parts to China.

Tesoro has promised its customers it will meet its contractual obligations by bringing in refined products from elsewhere. This could actually be more profitable for Tesoro, depending on the costs of maintaining a storage depot, since its mainland refineries are larger and operate on higher profit margins because of economies of scale. Tesoro has nonetheless indicated it plans to divest all of its Hawaii operations.

Chevron Corp. owns the other and smaller oil refinery in Hawaii. It is also in Kapolei. A report on the local petroleum market by UHERO, the UH Economic Research Organization, concluded that Chevron may also one day find it economical to replace its refinery with a storage depot and refine Hawaii oil products somewhere else.

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