Sunoco 2015 Annual Report Download - page 12

10
Refined Products
Our Refined Products segment provides transportation and terminalling services using an integrated network of pipeline
assets and refined products terminals, which are also utilized to facilitate acquisition and marketing activities. The segment also
includes equity ownership interests in four refined products pipelines.
Since December 31, 2010, we completed the following acquisitions in our Refined Products segment:
• In March 2014, we exercised rights to acquire an additional ownership in Explorer Pipeline Company
("Explorer") for $42 million, increasing the Partnership's ownership interest from 9.4 to 13.3 percent.
• In May 2011, we acquired an 83.8 percent equity interest in Inland from an affiliated entity and Shell Oil
Company. The pipeline connects three refineries in Ohio to terminals and major markets within the state. As we
have a controlling financial interest in Inland, the joint venture is reflected as a consolidated subsidiary in our
consolidated financial statements. We assumed operatorship of the pipeline in 2012.
Refined Products Pipelines
We own and operate approximately 1,800 miles of refined products pipelines in several regions of the United States. The
pipelines primarily provide transportation in the northeast, midwest, and southwest United States markets. The segment
includes our controlling financial interest in Inland.
The mix of products delivered varies seasonally, with gasoline demand peaking during the summer months, and demand
for heating oil and other distillate fuels peaking in the winter. In addition, weather conditions in the areas served by our refined
products pipelines affect both the demand for, and the mix of, the refined products delivered through the pipelines, although
historically, any overall impact on the total volume shipped has been short-term.
The products transported in these pipelines include multiple grades of gasoline, and middle distillates, such as heating oil,
diesel and jet fuel. Rates for shipments on our products pipelines are regulated by the FERC and other state regulatory agencies,
as applicable.
During the first quarter 2015, we commenced operations on the Allegheny Access pipeline project, which transports
refined products from the midwest to eastern Ohio and western Pennsylvania markets at a capacity of up to 85 thousand barrels
per day with the possibility to increase capacity to meet further demands.
The following table shows the average shipments on the refined products pipelines system in each of the years presented:
Year Ended December 31,
2015 2014 2013
Refined products pipelines throughput (thousands of bpd) (1) 492 456 492
(1) Excludes amounts attributable to equity ownership interests which are not consolidated.
In addition to our consolidated pipeline assets, we own equity interests in several common carrier refined products
pipelines, summarized in the following table:
Pipeline SXL Equity Ownership Approximate Pipeline Mileage
Explorer Pipeline Company (1) 13.3% 1,850
Yellowstone Pipe Line Company (2) 14.0% 700
West Shore Pipe Line Company (3) 17.1% 650
Wolverine Pipe Line Company (4) 31.5% 700
(1) The system, which is operated by Explorer employees, originates from the refining centers of Beaumont, Port Arthur and Houston,
Texas, and extends to Chicago, Illinois, with delivery points in the Houston, Dallas/Fort Worth, Tulsa, St. Louis, and Chicago areas.
Explorer charges market-based rates for all its tariffs.
(2) The system, which is operated by Phillips 66, originates from the Billings, Montana refining center and extends to Moses Lake,
Washington, with delivery points along the way. Tariff rates are regulated by the FERC for interstate shipments and the Montana
Public Service Commission for intrastate shipments in Montana.
(3) The system, which is operated by Buckeye Partners, L.P., originates from the Chicago, Illinois refining center and extends to
Madison and Green Bay, Wisconsin, with delivery points along the way. West Shore charges market-based tariff rates in the
Chicago area.
(4) The system, which is operated by Wolverine employees, originates from Chicago, Illinois and extends to Detroit, Grand Haven and
Bay City, Michigan, with delivery points along the way. Wolverine charges market-based rates for tariffs at the Detroit, Jackson,
Niles, Hammond and Lockport destinations.