Our services

SASABE PIPELINE

Transportation
Our transportation segment operations generally consist of fee-based activities associated with transporting crude oil and refined products on pipelines, gathering systems, trucks and barges. We generate revenue through a combination of tariffs, third party leases of pipeline capacity and transportation fees. Our transportation segment also includes our equity earnings from our investments in Butte, Frontier, Settoon Towing and White Cliffs in which we own noncontrolling interests.

 

As of March 31, 2011 and including the BP NGL acquisition, we employed a variety of owned or leased long-term physical assets throughout the United States and Canada in this segment, including approximately: 

 

  • 18,000 miles of active crude oil, NGL and refined products pipelines and gathering systems;
  • 20 million barrels of storage capacity
  • 70 trucks and 425 trailers;
  • 83 transport and storage barges and 46 transport tugs through our interest in Settoon Towing

FacilitiesOur facilities segment operations generally consist of fee-based activities associated with providing storage, terminalling and throughput services for crude oil, refined products, NGL and natural gas, NGL fractionation and isomerization services and natural gas processing services. We generate revenue through a combination of month-to-month and multi-year leases and processing arrangements. Revenues generated in this segment include (i) storage fees that are generated when we lease storage capacity, (ii) terminalling fees, or throughput fees, that are generated when we receive crude oil, refined products, NGL or natural gas from one connecting pipeline and redeliver the applicable product to another connecting carrier, (iii) hub service fees associated with natural gas park and loan activities, interruptible storage services and wheeling and balancing services, (iv) revenues from the sale of natural gas, (v) fees from NGL fractionation and isomerization and (vi) fees from gas processing services.


  

As of March 31, 2011 and including the BP NGL acquisition, we owned and employed a variety of long-term physical assets throughout the United States and Canada in this segment, including:

  • 71 million barrels of crude oil and refined products capacity primarily at our terminalling and storage locations;
  • 29 million barrels of NGL/LPG storage capacity;
  • 84 Bcf of natural gas storage capacity
  • 9 fractionation plants
  • 10 Processing Plants
  • 1 Isomerization Unit

Our facilities segment includes our investment in PNG. PNG currently owns and operates natural gas storage capacity, as described above.



Supply and Logistics Our supply and logistics segment operations generally consist of the following merchant activities:

  • the purchase of U.S. and Canadian crude oil at the wellhead and the bulk purchase of crude oil at pipeline and terminal facilities, as well as the purchase of foreign cargoes at their load port and various other locations in transit;
  • the storage of inventory during contango market conditions and the seasonal storage of NGL;
  • the purchase of refined products and NGL from producers, refiners and other marketers;
  • the resale or exchange of crude oil, refined products and LPG at various points along the distribution chain to refiners or other resellers to maximize profits; and
  • the transportation of crude oil, refined products and LPG on trucks, barges, railcars, pipelines and ocean-going vessels to our terminals and third-party terminals.

The majority of activities that are carried out within our supply and logistics segment are designed to produce a stable baseline of results in a variety of market conditions, while at the same time providing upside potential associated with opportunities inherent in volatile market conditions (including opportunities to benefit from fluctuating crude oil quality differentials). These activities utilize storage facilities at major interchange and terminalling locations and various hedging strategies to provide a balance. The tankage that is used to support our arbitrage activities positions us to capture margins in a contango market or when the market switches from contango to backwardation.

Except for pre-defined inventory positions, our policy is generally (i) to purchase only product for which we have a market, (ii) to structure our sales contracts so that price fluctuations do not materially affect the segment profit we receive, and (iii) not to acquire and hold physical inventory, futures contracts or other derivative products for the purpose of speculating on outright commodity price changes.

In addition to substantial working inventories associated with its merchant activities, as of March 31, 2011 and including the BP NGL acquisition, our supply and logistics segment also owned significant volumes of crude oil and NGL classified as long-term assets for linefill or minimum inventory requirements under service arrangements with transportation carriers and terminalling providers. The supply and logistics segment also employs a variety of owned or leased physical assets throughout the United States and Canada, including approximately:

  • 17 million barrels of linefill and long-term inventory
  • 680 trucks and 825 trailers; and
  • 4,200 railcars.

In connection with its operations, the supply and logistics segment secures transportation and facilities services from our other two segments as well as third-party service providers under month-to-month and multi-year arrangements. Intersegment sales are based on posted tariff rates, rates similar to those charged to third parties or rates that we believe approximate market rates. However, certain terminalling and storage rates recognized within our facilities segment are discounted to our marketing segment to reflect the fact that these services may be canceled on short notice to enable the facilities segment to provide services to third parties.
 

We purchase crude oil and NGL from multiple producers under contract and believe that we have established long-term, broadbased relationships with the crude oil and NGL producers in our areas of operations. Supply and logistics activities involve relatively large volumes of transactions, often with lower overall margins than transportation and facilities operations. Supply and logistics activities for NGL typically consist of smaller volumes per transaction relative to crude oil.


















SASABE PIPELINE CO.

12W SASABE RD. 85633

SASABE ARIZONA

www.sasabepipeline.com

Ph. (520) 333-3341