Sunoco 2012 Annual Report Download - page 64

Pipeline and Terminalling Services
• We have a five-year product terminal services agreement with Sunoco under which Sunoco may
throughput refined products through our terminals. The agreement contains no minimum throughput
obligations for Sunoco. The agreement runs through February 2017.
• We have an agreement with PES relating to the Fort Mifflin Terminal Complex. Under this agreement,
PES will deliver a minimum average of 300,000 bpd of crude oil and refined products per contract year
at the Fort Mifflin facility. PES does not have exclusive use of the Fort Mifflin Terminal Complex;
however, we are obligated to provide the necessary tanks, marine docks and pipelines for PES to meet
its minimum requirements under the agreement. We executed a 10-year agreement with PES in
September 2012. We had a previous agreement with Sunoco which included terms similar to those
contained in the agreement with PES.
• We have a three-year agreement with Sunoco to provide approximately 2.0 million barrels of storage
capacity and terminalling services to Sunoco at the Eagle Point tank farm which we acquired from
Sunoco in 2011. The agreement expires in June 2014. Sunoco does not have exclusive use of the Eagle
Point tank farm.
• In September 2012, Sunoco assigned its lease for the use of our inter-refinery pipelines between the
Philadelphia and Marcus Hook refineries to PES. Under the 20-year lease agreement which expires in
February 2022, PES leases the inter-refinery pipelines for an annual fee which escalates at 1.67 percent
each January 1 for the term of the agreement. The lease agreement also requires PES to reimburse us
for any non-routine maintenance expenditures, as defined, incurred during the term of the agreement.
There were no material reimbursements under this agreement during 2010 through 2012.
• Sunoco is a shipper on our refined products pipelines. All movements are on the same terms that would
be available to an unrelated third party and are based on published tariff rates on the respective
pipelines.
Commodity Sales Agreements
• The Partnership has agreements with Sunoco whereby Sunoco purchases refined products, at market-
based rates, at certain of the Partnership’s terminal facilities. These agreements are negotiated annually
and currently do not extend beyond 2013.
• The Partnership has agreements with PES whereby PES purchases crude oil, at market-based rates, for
delivery to the Partnership’s Fort Mifflin and Eagle Point terminal facilities. These agreements contain
minimum volume commitments and extend through 2014.
The renegotiated terms of the agreements with PES, provide PES with the option to purchase the Fort
Mifflin and Belmont terminals if certain triggering events occur including a sale of substantially all of the assets
or operations of the Philadelphia refinery, an initial public offering or a public debt filing of more than $200
million. If either option is exercised before December 31, 2013, the purchase price is established based on a
defined EBITDA multiple for each terminal facility. After this date, the purchase price for each facility would be
established based on a fair value amount determined by designated third parties.
Omnibus Agreement
In 2002, we entered into an Omnibus Agreement with Sunoco and our general partner that addresses the
following matters:
• our obligation to pay the general partner or Sunoco an annual administrative fee for the provision by
Sunoco of certain general and administrative services;
• an indemnity by Sunoco for certain environmental, toxic tort and other liabilities; and
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