Tesoro Logistics LP Receives FTC Clearance for the Purchase of Chevron Pipe Line Company's Northwest Products System

SAN ANTONIO - June 17, 2013 - Tesoro Logistics LP (NYSE:TLLP) ("TLLP" or the "Partnership") today announced that the Federal Trade Commission ("FTC") has cleared the Partnership's acquisition of the Northwest Products Pipeline and Terminal System ("Northwest Products System") from Chevron Pipe Line Company and Northwest Terminalling Company.  Pursuant to the regulatory review process, TLLP has agreed to divest its current refined products terminal in Boise, Idaho within 180 days.  The divestiture of the existing Boise terminal is not expected to materially impact EBITDA.  TLLP expects the acquisition of the Northwest Products System to close on June 19, 2013, subject to customary closing conditions.

"We are pleased to have received the FTC's clearance of the Northwest Products System acquisition," said Greg Goff, TLLP's Chairman and Chief Executive Officer.  "We continue to expect that the system will allow TLLP to capture operational synergies with our existing terminal assets in the region and estimate that the assets will contribute $30 million to $35 million of EBITDA in the first twelve months of operation."

The purchase price for the Northwest Products System is $355 million.  Additionally, TLLP expects to invest $15 million to $25 million over the next two years to implement a comprehensive inspection and repair program to further improve the integrity of the pipeline system.  The Partnership expects to utilize net proceeds from the $392 million equity offering in January 2013 to fund the acquisition of the Northwest Products System.

The Northwest Products System consists of the Northwest Product Pipeline, a 760-mile Federal Energy Regulatory Commission (FERC)-regulated common carrier products pipeline which extends from Salt Lake City, Utah to Spokane, Washington, a five-mile jet fuel pipeline to the Salt Lake City International Airport and certain assets of the Northwest Terminalling Company, consisting of refined products terminals in Boise and Pocatello, Idaho and Pasco, Washington.

The common carrier pipeline is the primary source of refined products to southern Idaho and is a major supplier of refined products to eastern Washington.  For 2012, throughput volumes on the pipeline system averaged approximately 87,000 barrels per day.  The terminals have a total storage capacity of 1.3 million barrels and delivered an average of approximately 56,000 barrels per day.

About Tesoro Logistics LP
Tesoro Logistics LP, headquartered in San Antonio, Texas, is a fee-based, growth-oriented Delaware limited partnership formed by Tesoro Corporation to own, operate, develop and acquire crude oil and refined products logistics assets. 

This press release contains certain statements that are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 concerning the transaction closing date; the capture of operational synergies; expected EBITDA from the assets to be acquired; and potential costs associated with the pipeline inspection program and integrity work.  For more information concerning factors that could affect these statements see our annual report on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission. We undertake no obligation to publicly release the result of any revisions to any such forward-looking statements that may be made to reflect events or circumstances that occur, or which we become aware of, after the date hereof.

Contact:
Investors:
Louie Rubiola, Senior Director, Investor Relations, (210) 626-4355

Media:
Tesoro Media Relations, media@tsocorp.com, (210) 626-7702

TESORO LOGISTICS LP
RECONCILIATION OF FORECASTED EBITDA TO AMOUNTS UNDER US GAAP
(Unaudited, in millions)

(a) Forecasted net interest and financing costs assume an equal split of debt and equity financing.
(b) We define EBITDA as net income before net interest and financing costs and depreciation and amortization expenses.  Forecasted amounts presented assume that expenditures for maintenance will be capitalized on the balance sheet.  However, as we obtain a better understanding of the maintenance required as a result of inspections, we may identify costs that will be recorded as operating and maintenance expense.  EBITDA should not be considered as an alternative to net income in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). EBITDA has important limitations as an analytical tool, because it excludes some, but not all, items that affect net income. EBITDA is not a measure prescribed by U.S. GAAP but is a supplemental financial measure that is used by management and may be used by external users of our financial statements, such as industry analysts, investors, lenders and rating agencies to assess:

• our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or financing methods;
• the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;
• our ability to incur and service debt and fund capital expenditures; and
• the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.