Sunoco 2010 Annual Report Download - page 13

Refining and Supply sells fuels through wholesale and industrial channels principally in the Northeast and
upper Midwest and sells petrochemicals on a worldwide basis. The following table sets forth Refining and
Supply’s refined product sales (excluding those from the Tulsa refinery) (in thousands of barrels daily):
2010 2009 2008
To Unaffiliated Customers:
Gasoline ................................................... 139.0 147.6 186.4
Middle Distillates ............................................ 226.8 223.5 269.2
Residual Fuel ............................................... 39.7 69.5 65.4
Petrochemicals .............................................. 12.1 7.3 12.5
Other ...................................................... 22.6 24.2 31.3
440.2 472.1 564.8
To Affiliates*................................................. 333.8 341.8 348.5
774.0 813.9 913.3
*Includes gasoline and middle distillate sales to Retail Marketing and benzene, cumene and propylene sales to Chemicals.
Feedstocks can be moved between Refining and Supply’s refineries in the Northeast by barge, truck and
rail. In addition, an interrefinery pipeline leased from Sunoco Logistics Partners L.P. enables the transfer of
unfinished stocks, including butanes, naphtha, distillate blendstocks and gasoline blendstocks between the
Philadelphia and Marcus Hook refineries. Finished products are delivered to customers via the pipeline and
terminal network owned and operated by Sunoco Logistics Partners L.P. (see “Logistics” below) as well as by
third-party pipelines and barges and by truck and rail.
During the 2008-2009 period, Refining and Supply had capital outlays of approximately $370 million to
essentially complete projects at its Philadelphia and Toledo refineries under a 2005 Consent Decree, which
settled certain alleged violations under the Clean Air Act. Additional capital outlays totaling approximately
$150-$200 million related to projects at the Marcus Hook refinery are currently required to be made under the
2005 Consent Decree prior to June 30, 2013. The Company is currently discussing a potential extension of the
required timeframe to provide additional time to explore options that will lower the cost of the total project in
return for emission reductions at Marcus Hook and other Sunoco facilities.
The Refining and Supply capital spending for the 2008-2009 period also included a project at the
Philadelphia refinery to reconfigure a previously idled hydrocracking unit to enable desulfurization of diesel fuel.
This project, which was completed in 2009 at a cost of approximately $200 million, increased the facility’s
ultra-low-sulfur diesel fuel production capability by 45 thousand barrels per day by upgrading current production
of 35 thousand barrels per day of temporary compliance order diesel fuel (TCO) and 10 thousand barrels per day
of heating oil.
Refining and Supply carried out an alkylation process improvement project at its Philadelphia refinery’s HF
alkylation unit. The project involved the incorporation of ReVAP™ technology which required substantial
improvements and modifications to the alkylation unit and supporting utility systems. The project was completed
during 2010 at a cost of approximately $95 million.
In connection with the sale of its polypropylene business to Braskem S.A. (“Braskem”), Sunoco entered into
a ten-year agreement to supply polymer-grade propylene to Braskem’s Marcus Hook polypropylene plant. At the
end of the ten-year term, this agreement may be renewed annually unless cancelled by either party. Under the
agreement, Sunoco is required to supply Braskem with a minimum of 380 million pounds of polymer-grade
propylene annually at a market-related price. Both Sunoco and Braskem are subject to liquidating damages which
decline over the term of the agreement if either terminates the agreement prior to its expiration. In the event of a
termination by the other party, Sunoco would have an option to buy Braskem’s Marcus Hook polypropylene
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