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TheStreet Open House

Western Refining's CEO Presents At UBS Global Oil And Gas Conference (Transcript)

Alright this is very hard to read. So, within your packets, if you could look at the map there and what I want to describe are the assets that we have and the phenomena going on in the Permian Basin. So we have two refineries in El Paso, Texas and Gallup New Mexico and they sit on the part of the Permian Basin, El Paso does. This outline, the white line is the Permian. The blue line is the Delaware Basin within the Permian, and then Gallup, it’s up here in the Four Corners area.

We also have some wholesale business and retail business that I will get into in a second, but did want to talk about the thing that we think makes us pretty unique in our neck of the woods and that we have an ability to buy this discounted crude and you’ve all been told and you’ve all been aware of the WTI-Brent discount. But buy this discounted crude and sell it into markets some of which has some West Coast pricing influence, which has typically been higher than other margin environments. So buying discounted crude and selling products into some premium markets because of the location of our facilities.

But what's going on here in the Permian is that you read about this new crude coming onboard and having a logistically tough time getting out of the market. There are a couple of pipeline solutions that will come on board over the next couple of months. There is the Basin pipeline which runs up from Midland to Cushing.

So here is Midland to Cushing, that’s a 450,000 barrel a day line. It's four today, but there are two new lines, one being expanded and one being reversed that will also solve this problem longer term between Midland and Cushing. There is a West Texas Gulf Line that runs from Colorado City to the Houston Ship Channel, it's 240,000 barrels a day expandable by a 120,000 barrels up to 360,000 and that will be done by the end of this year. And there is the reversal of the Longhorn Pipeline, that’s a product line today that will be reserved into a crude line and run from Crane back down to the Gulf Coast and deliver initially about a 100,000 barrels of crude out of that market.

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