Transition Team Delivers
Successful Pipeline System Acquisition
The Northwest Products System (NWPS) pipeline originates in Salt Lake City, and runs for approximately 760 miles through Utah, Idaho, Oregon and Washington before terminating in Spokane.
Until recently, NWPS was owned by Chevron, and Tesoro was its largest external customer. Today, the Company owns NWPS, and Chevron is its largest external customer.
That major change was made possible by a transition team composed of exceptional people and managed by Rusty Phelps, who is now Senior Growth Portfolio Manager for Tesoro Logistics, LP (TLLP). And according to Rusty, the entire team viewed the acquisition as a major opportunity.
Rusty noted, “two hundred people were working on the transition, and together, 14 different workstreams were being managed.”
NWPS’s accounts, equipment and operational procedures all needed to be moved from Chevron to our control center, which Rusty compares to air traffic control. It’s the entity that manages the movement of specific petroleum products through the pipeline on behalf of specific customers.
Accounting issues were the biggest concern. “Once the transition had completed, we would no longer have access to Chevron’s systems,” Rusty said. “So we needed to ensure we were effectively moving all the relevant functionality and procedures from one system to the other. We also needed to ensure correct maintenance of all systems and data related to regulatory compliance issues.”
Another major issue was the smooth transition of new employees who would now be joining the Company.
Operationally, the success of the transition is shown by the fact that, since the acquisition, the volume of assets pumped through the pipeline has continued to increase.
From an environmental standpoint, the Company has demonstrated a commitment to assuring the system’s integrity. “Based on a leak that occurred before we signed the agreement, we insisted on testing the entire 760-mile system,” Rusty said. “Our efforts have made the pipeline much safer, with far less likelihood of ruptures or spills. And since we’re committed to being a good neighbor, that is extremely important”
“We look forward to our continued growth strategy. These types of acquisitions are critical to Tesoro’s future,” Rusty concluded. “We’re committed to delivering on their potential and exceptional people are making that possible.”
Find this story and learn more about Tesoro’s Guiding Principles in our 2013 Social Responsibility Report.