Sunoco 2013 Annual Report Download - page 10

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The following table outlines the number of active terminals and storage capacity by state:
State Number of
Terminals Storage Capacity
(thousands
of barrels)
Indiana 1 206
Louisiana 1 161
Maryland 1 710
Massachusetts 1 1,144
Michigan 3 760
New Jersey 3 650
New York (1) 4 920
Ohio 7 957
Pennsylvania 13 1,743
Texas 4 548
Virginia 1 403
Total 39 8,202
(1) We have a 45 percent ownership interest in a terminal at Inwood, New York and a 50 percent ownership interest in a
terminal that we operate in Syracuse, New York. The storage capacities included in the table represent the
proportionate share of capacity attributable to our ownership interests in these terminals.
Refined Products Acquisition and Marketing
Our refined products acquisition and marketing activities include the acquisition, blending, marketing and selling of
refined products and NGLs at our various terminals and third-party facilities. Since the acquisition of our butane blending
business in 2010, we have continued to expand our butane blending service platform by installing our blending technology at
certain of our refined product terminals, as well as at third-party facilities. We have also commenced operations in the NGL
market with the acquisition of the Marcus Hook Facility (see below). The operating results of our refined products acquisition
and marketing activities are dependent on our ability to execute sales in excess of the aggregate cost, and therefore we structure
our acquisition and marketing operations to optimize the sources and timing of purchases and minimize the transportation and
storage costs. In order to manage exposure to volatility in refined products prices, our policy is to (i) only purchase refined
products for which sales contracts have been executed or for which ready markets exist, (ii) structure sales contracts so that
price fluctuations do not materially impact the margins earned, and (iii) not acquire and hold physical inventory, futures
contracts or other derivative instruments for the purpose of speculating on commodity price changes. However, we do utilize a
seasonal hedge program involving swaps, futures and other derivative instruments to mitigate the risk associated with
unfavorable market movements in the price of refined products and NGLs. These derivative contracts act as a hedging
mechanism against the volatility of prices.
Nederland Terminal
The Nederland Terminal, which is located on the Sabine-Neches waterway between Beaumont and Port Arthur, Texas, is
a large marine terminal providing storage and distribution services for refiners and other large transporters of crude oil. The
terminal receives, stores, and distributes crude oil, feedstocks, lubricants, petrochemicals, and bunker oils (used for fueling
ships and other marine vessels), and also blends lubricants. The terminal currently has a total storage capacity of approximately
22 million barrels in approximately 130 aboveground storage tanks with individual capacities of up to 660 thousand barrels.
The Nederland Terminal can receive crude oil at each of its five ship docks and three barge berths. The five ship docks
are capable of receiving over 2 million bpd of crude oil. In addition to our Crude Oil Pipelines, the terminal can also receive
crude oil through a number of other pipelines, including:
• the Cameron Highway pipeline, which is jointly owned by Enterprise Products and Genesis Energy;
• the ExxonMobil Pegasus pipeline;
• the Department of Energy ("DOE") Big Hill pipeline; and
• the DOE West Hackberry pipeline.
The DOE pipelines connect the terminal to the United States Strategic Petroleum Reserve's West Hackberry caverns at
Hackberry, Louisiana and Big Hill near Winnie, Texas, which have an aggregate storage capacity of approximately 400 million
barrels.