# Presentation: 789131

- Clean Diesel Fuel Implementation Workshop “Marketing Concerns”

**Presented By**:
- Steven Levy
*November 2002*

## Sprague Facts

- Founded in 1870 as a supplier of coal and whale oil
- Wholly owned subsidiary of Axel Johnson Inc, a member of the Axel Johnson group of Stockholm, Sweden
- Distribute annually along the Eastern Seaboard:
- 2.5 billion gallons of petroleum products
- 91 billion BTU’s of natural gas
- 600 million kilowatts of electricity
- Handle 3 million tons of bulk materials
- Store and handle petroleum and non-petroleum products in 16 terminals
*Sprague Advantage*:  customer focused, value-added program of services, consultation and support
- Purchased the assets of RAD Energy, Purchase, NY – January 2001

## Sprague Distribution Network

**Bucksport**

**Searsport**

**South Portland**

**Portsmouth**

**Newington**

**Quincy**

**Everett**

**Springfield**

**Oswego**

**Albany**

**Altoona**

**Dupont**

**Allentown**

**Harrisburg**

**Exchange/Throughput**

**Sprague Owned**

**Delaware City**

**Newark**

**Linden**

**Paulsboro**

**Providence**

**Hartford**

**Portland**

**New  Haven**

**Bridgeport**

**Stamford**

**Mt. Vernon**

**Oceanside**

**Oyster Bay**

**Rutland**

**Middlebury**

**White River Junction**

**Bellow Falls**

**Sprague ULSD Storage**

**Tremley Pt.**

## Will the concerns for the supply and distribution of  Ultra Low Sulfur Diesel (ULSD) fuel today be the same in 2006?

## Supply & Distribution Challenges:

**Supply**

-  End user product specifications
-  Sulfur (15ppm  30ppm)
-  Lubricity (SLBOCLE vs. HFRR)
-  #1 diesel vs. #2 diesel
-  #2 winterization
-  Dyed vs. non-dyed
-  Maintaining product integrity
-  Meet OEM specifications
-  Quantity, cost, geographic location, etc.
-  Secure source(s) of supply
-  Current, new, open market supplier(s)
-  Inventory product
- Multiple strategically located storage facilities

- Non-compliance penalties

## Supply & Distribution Challenges:

**Supply *****(continued)***

-  Inventory position
-  Satisfy current contract demands
-  Future opportunities
-  Unforeseen event
-  Financial impact: Costs
-  Product
-  Inventory carry
-  Accounts receivable
-  Product integrity
-  Terminal and equipment resources
-  Manpower

## Supply & Distribution Challenges:

**Maintaining Product Integrity**

-  Secure clean waterborne vessel for product
-    transportation
-  Segregated multiple storage facilities
-  Separate fill lines from dock to storage tank and from
-    storage tank to transport loading position
-  If separate fill lines unavailable, purge product into
-    separate tank
-  Designate dedicated & segregated transport
-   deliveries
-  Current/new equipment
-  Common carrier (same quality control measures as
-    our own fleet)

## Supply & Distribution Challenges:

**Maintaining Product Integrity *****(continued)***

-  Develop quality control procedures for transport
-    equipment
-  Flush segregated equipment several times with ULSD
-  After purging, load transport and sample

## Quality Control Assurance

**Inspect/sample ULSD at refinery/storage tanks**

**Quality Control Assurance**
**Inspection/Testing Process***

**Flush out all lines at pickup point**

**Inspect/sample ULSD before discharging from vessel into segregated storage**

**After vessel completes discharge, inspect/sample ULSD from segregated storage**

**If separate lines not available, purge lines**

- Bulk Distribution

**Inject additive**

- * All inspections and sampling activity by an approved independent inspector

## Quality Control Assurance

**Inspect/sample ULSD in transport**

**Inspect/sample ULSD in end user storage tank**

**Quality Control Assurance**

- Transport Distribution

**Use segregated piping to transport**
**loading position from terminal storage**

**End User Options**

**Empty & clean tank prior to receiving ULSD**

**Receive deliveries of ULSD to purge tank**

*Option A*

*Option B*

## Key Ingredients for Success

-  Financial strength/relationships
-  Product integrity controls
-  Reliability and consistency of supply
-  Hands on coordinated effort by company
-    and end user personnel
-  Detail oriented, dedicated staff

## Retail/End User Concerns

-   Tank segregation
-   Product verification
-   Financial impact
-   OEM warranties
-   Reliability of supply
-   Enforcement of regulation

## Summary of Concerns for 2006

-  Effect on supply
-  Sulfur regulation enforcement
-  Sulfur testing standards
-  Measurement
-  Type of instrumentation
-  Associated costs
-   Storage (15 ppm and/or 500 ppm)
-  Terminal
-  Retail/end user

**Summary of Concerns for 2006**
***(continued)***

-  Product Availability/Specifications
-  Sulfur (15ppm  30ppm)
-  Lubricity (SLBOCLE vs. HFRR)
-  #1 diesel vs. #2 diesel
-  #2 winterization
-  Dyed vs. non-dyed
-  Maintaining product integrity
-  Meet OEM specifications
-  Quantity, cost, geographic location, etc.
-  Off-road, aviation, marine fuels
-  Total Financial Impact & Personnel
-    Requirements

- What will be the driving force of
- On-Road Diesel Fuel sales in 2006?
- Product availability
- Customer requirements
- Storage
- Financial impact

## Contact Information

- Steven J. Levy
- 4 New King Street
- White Plains, NY  10604
- Phone:  (914) 328 – 6770
- Fax:      (914) 328 – 6701
- Email:  slevy@spragueenergy.com