Tesoro to store more asphalt

The refinery will increase storage capacity to avoid future shortages

Tesoro Hawaii will spend nearly $1 million to expand its liquid asphalt storage capacity to meet the demands of the state's paving industry.

The refinery ran out of liquid asphalt last week, halting city pothole repairs, state roadway resurfacing and some military projects. Grace Pacific, Corp. laid off 160 workers statewide because of the shortage.

CREATING ASPHALT Details about Tesoro's current liquid asphalt production: » Storage capacity: 25,000 barrels » Capacity after expansion: 125,000 barrels » Expected completion: Within two months » Cost: Nearly $1 million Source: Tesoro Hawaii

Tesoro announced yesterday it will reconfigure storage tanks at its Kapolei facility to increase its liquid asphalt storage capacity fivefold. It expects to complete the work within two months.

Until then, Tesoro plans to satisfy as much of the demand as it can with its 25,000-barrel tank, which has been empty since the company ran out of liquid asphalt Friday.

"We're going to do the best we can," said Bill Haywood, Tesoro senior vice president of refining.

Tesoro plans to fill the tank on June 2 or June 3, after the next shipment of asphalt-producing crude oil arrives, said company spokeswoman Jeanette Mukai. It plans to fill the tank again on June 14 and again on June 25, she said.

"I can assure you we will empty that tank as soon as they fill it up," said Bob Wilkinson, president and chief executive officer of Grace Pacific Corp.

Grace Pacific and James W. Glover Ltd. are Hawaii's major producers of road asphalt, made by mixing liquid asphalt with aggregate.

Wilkinson said his company is assisting 160 employees statewide who are out of work because of the current asphalt shortage.

When the supply of asphalt does resume next month, it will not be enough for Grace Pacific to return to full capacity, Wilkinson said, but he is pleased with the Tesoro announcement. He said he was considering building his own storage facility and importing liquid asphalt.

"It'll save me about 7 to 8 million bucks," he said.

Tesoro became the only liquid asphalt supplier in Hawaii after the state's other petroleum refiner, Chevron Hawaii, stopped production.

Chevron decided to stop liquid asphalt production in Hawaii last November and announced its decision to island paving industry officials in December, said Albert Chee, Chevron Hawaii spokesman.

He said the company made the decision because it believed Tesoro would be able to increase its production to make up the difference.

Chevron produced 500 to 550 barrels of liquid asphalt per day on average, and does not believe it was the major producer in Hawaii, Chee said. And he said the company did not communicate its decision to Tesoro directly, but believed paving industry officials informed Tesoro officials of Chevron's intention as early as last December.

Chee said the company stopped producing liquid asphalt in February, with the last load leaving the refinery in late March or early April.