Sunoco 2011 Annual Report Download - page 12

Crude oil pipeline operations, located in the southwest and midwest United States, transport foreign crude
oil received at the Partnership’s Nederland, TX and Marysville, MI terminals and crude oil produced primarily in
Oklahoma and Texas to refiners or to local trade points.
The Partnership exercised its rights to acquire additional ownership interests in Mid-Valley Pipeline
Company (“Mid-Valley”) and West Texas Gulf Pipe Line Company (“WTG”) for a total of $85 million during
the third quarter of 2010, increasing its ownership interests in Mid-Valley and WTG to 91 and 60 percent,
respectively. As the Partnership obtained a controlling financial interest in both Mid-Valley and WTG, the joint
ventures were both reflected as consolidated subsidiaries of Sunoco from the dates of their respective
acquisitions.
In the third quarter of 2009, the Partnership acquired Excel Pipeline LLC, the owner of a crude oil pipeline
which services Gary Williams’ Wynnewood, OK refinery for $32 million.
Crude oil acquisition and marketing activities include the gathering, purchasing, marketing and selling of
crude oil primarily in Oklahoma and Texas. During 2011, 2010 and 2009, approximately 224, 189 and
181 thousand barrels daily, respectively, of crude oil were purchased (including exchanges) from third-party
leases and approximately 439, 449 and 411 thousand barrels daily, respectively, were purchased in bulk or other
exchange transactions. Purchased crude oil is delivered to various trunk pipelines either directly from the
wellhead through gathering pipelines or utilizing the Partnership’s fleet of trucks or third-party trucking
operations.
In August 2011, the Partnership acquired a crude oil purchasing and marketing business from Texon for
$222 million including $17 million attributable to the fair value of crude oil inventory. The purchase consists of a
lease crude business and gathering assets in 16 states, primarily in the western United States. The current crude
oil volume of the business is approximately 75 thousand barrels per day at the wellhead.
The Partnership intends to take advantage of additional growth opportunities in the future, both within its
current system and with third-party acquisitions.
Sunoco has agreements with the Partnership which establish fees for administrative services provided by
Sunoco to the Partnership and provide indemnifications by Sunoco for certain environmental, toxic tort and other
liabilities.
Retail Marketing
The Retail Marketing business consists of the retail sale of gasoline and middle distillates and the operation
of convenience stores in 23 states, primarily on the east coast and in the midwest region of the United States. The
highest concentrations of outlets are located in Connecticut, Florida, Maryland, Massachusetts, Michigan, New
Jersey, New York, Ohio, Pennsylvania and Virginia. The Company has increased its retail gasoline outlets by
over 200 sites over the three-year period ended December 31, 2011.
In August 2011, Sunoco entered into leasehold agreements for 14 retail locations located in central
Pennsylvania. Each site will be company operated and include an APlus®convenience store.
In January 2011, Sunoco reached an agreement to begin operating the nine fuel stations at service plazas
along the Garden State Parkway located in New Jersey. The six-year agreement began in January 2011 and runs
through December 2016. Sunoco also announced an extension on the two fuel stations along the Palisades
Parkway, also in New Jersey, through December 2015.
In December 2010, Sunoco acquired 25 retail locations consisting of assets located in the Buffalo, Syracuse,
Albany, and Rochester markets of central and northern New York for $25 million including inventory. Sunoco
was also selected by the Ohio Turnpike Commission to operate the fuel stations at the 16 service plazas along the
Ohio Turnpike under an initial lease agreement from 2012 through 2016 with renewals available through 2026.
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