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Ohio Retail Limited Liability Company Operating Agreement

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Ohio Retail Limited Liability Company Operating Agreement Powered By Docstoc
					Table of Contents
                                        Slide Number
                                           Slide #
      lRefining                             4
      lMarathon Supply                      5
      lTerminal,Transport & Marine          6
      lMarathon Pipe Line LLC               7
      lBrand Marketing                      8
      lSales & Marketing                    9
      lSpeedway SuperAmerica LLC           10
      lCorporate Responsibility         11-13
      lGlossary                         14-31

Information current as of March, 2009
    Based in Findlay, Ohio, Marathon Petroleum
    Company LLC (Marathon) is the nation’s fifth
    largest transportation fuels refiner with
®
    1,016,000 barrels-per-day capacity in its seven-
    refinery system. Marathon’s retail marketing
    system comprises approximately 6,200
    locations in 18 states, nearly three-quarters are
    Marathon brand locations. Marathon serves the
    Midwest, Upper Great Plains, Gulf Coast and
    Southeast as a petroleum products marketer,
    owning or operating 87 light product and
    asphalt terminals. The Company owns,
    operates, leases or has ownership interest in
    about 10,000 miles of pipeline. Marathon is a
    limited liability company owned 100 percent by
    Marathon Oil Corporation (NYSE:MRO).
    Marathon's roots reach into the early years of
    the oil industry.
                                                      Detroit: Paul Park:
                                                           St.
                                                      102,000 BPCD
                                                            74,000 BPCD


                                                          Canton:
                                                          78,000 BPCD      Refining
                                                                         Robinson:
                                                                              Total refining capacity:
                                                                      204,000 BPCD
                                                                                   1,016,000 BPCD;
                                                  Catlettsburg:                    Approximately 6% of total
                                                  226,000 BPCD                     U.S. Capacity
                                                                               Crude throughput in 2008:
                                                                                   944,000 BPCD
                                                                               Feedstock/Blendstock Inputs:
                                                                                   207,000 BPCD
                              Garyville:
                                                                            Marketing in 2008:
  Texas City:
                              256,000 BPCD
76,000 BPCD
                                                                               (1) Consolidated Refined Product
                                                                                   Sales:
                                                                                     20.8 billion gallons
                                                                               (2) Consolidated Refined Product
             BPCD= barrels per calendar day
                                                                                   Purchases:
                                                                                     2.90 billion gallons

 (1) Total MPC sales (MPC + SSA) minus sales to SSA
 (2) MPC plus SSA 3rd party purchases
                                          Marathon Supply
    Crude                  Feedstock                  Product
  Oil Supply                Supply                   Purchases      
                                                                    Ethanol:
                                                                     • Marathon has more than 15 years history of
 Canadian 14%              Canadian 5%                Other 1%          blending with gasoline.
                                                                     • In 2008, 57 MBPD* of ethanol was blended into
   Foreign 36%             Foreign 38%             Distillate 20%
                             (Aruba, Mexico,
                                                                        gasoline.
   (Saudi Arabia,
Kuwait, Mexico, Basra)      Venezuela, Other)
                                                     Alternative      
                                                                     • Has the capacity to blend E-10 across its entire
                                                     Fuels 32%         gasoline distribution network..
                                                                                                   Fuel Oil 3%
                                                                     • Has interest in two 110 (MMGPY) ethanol
  Domestic 50%                                                          facilities: Clymers, Ind. (35%) and Greenville,
                          Domestic 57%             Gasoline 47%         Ohio (50%).

                                                                    Biodiesel Fuel:
                                                                     • Sell biodiesel in Minnesota, Illinois, and
          *Thousand barrels per day ** million gallon per day          Kentucky.
                                                           Terminal,
                                                       Transport & Marine
                                   65 owned or operated(1) and 57 leased light product
                                   terminals (gasoline, diesel, kerosene, jet fuel)
                                      1.4 MMBPCD(2) light product throughput
                                      137 MBPCD(3) light products delivered via MPC trucks
                                   22 owned or operated(1) and 11 leased heavy oil, coke and
                                   asphalt (4) terminals
                                      97.5 MBPD of asphalt refining capacity
                                      68 MBPCD asphalt terminal throughput
                                   144 owned transport trucks 268 transport loading racks
                                   15 inland waterway tow boats and 196 barges owned
                                      418 MBPCD light products, heavy oils, asphalt,
                                      feedstocks and chemicals transported by Marine
                                   Approximately 2,500 owned or leased railcars

Light Product Terminals
  MPC Owned         Part Owner   (1) Includes refinery-owned loading racks at Canton, Ohio, and St. Paul Park, Minn.
  Exchanged/Throughput           (2) Million barrels per calendar day
                                 (3) Thousand barrels per calendar day
Asphalt/Heavy Oil Terminals      (4) Operated seasonally
  MPC Owned        MPC Leased
Water Supplied Terminals
    Coastal          Inland
                                                                        MPC Owned & Operated
                                                                        MPC Interest; Operated by MPC
                                                                        MPC Interest; Operated by Others
                                                                        Pipelines Used by MPC




Marathon Pipe Line LLC
Downstream owns, operates, leases or has ownership interest in 72 pipeline systems in 16 states and
federal waters with approximately 10,000 miles of pipeline including interest in Capline, LOOP LLC,
LOCAP LLC, Explorer and Wolverine systems.

Operates Centennial Pipeline LLC, a joint venture that stretches 800 miles from Texas to Illinois.

Controls movement/delivery of approximately 116 million gallons per day of crude oil and petroleum
products.
    94
                                                                                                        ®
           99
                     784                                                 Brand Marketing
                                    28                                  2008 sales: 3.7 billion gallons
            467 621 887
                                         1                              4,499 outlets
                              80                                        Located in 19 states
                     512            93
                122                146
                              44
            1   54      271
1


      Brand Jobber         194
     Dealer Locations




                                      learn more about Marathon Brand Marketing, please visit our website at
                                     To
                                     www.marathonpetroleum.com and for station locations, go to www.marathonpetroleum.com/stations/
Sales 1,230 MBPCD*                          Commodity Group                                            Marketing Group
                                                                                                              Special Products & Feedstocks 6%
                                         Heavy Fuel Oil/Coke 3%
                                              Asphalt 6%                                                                                Asphalt & Heavy
                                           Special Products 6%                                                                            Fuel Oil 10%
                                                                                                        Speedway 15%
                                                Distillate 28%

                                                                                                    Marathon Brand 18%




                                                Gasoline 57%
                                                                                                        Wholesale 51%




                                                                                         Excludes sales by MPC’s Supply, Distribution and Planning organization.
 These values are based on 2008 actual data. *MBPCD = thousand barrels per calendar day. 

  Marketing
        
        Retail
          Marathon’s retail marketing system (Marathon Brand and Speedway SuperAmerica), comprises
          approximately 6,200 locations in 18 states.
        Wholesale
          One of the largest wholesale suppliers of gasoline and distillate within its market area.
        Asphalt, Heavy Oil and Coke
          • Averaging 117 MBPCD production.
          • One of the largest domestic asphalt producers.
        Special Products
          Markets propane, propylene, off-gas, cumene, benzene, toluene, xylene, dilute naphthalene oil,
          molten sulfur, and maleic anhydride.
                161
                 58 (1)
1   1 (1)                  70
                            5 (1)       314

                             97             474
                                    239                                                                          ®

                                                  61
                                       136                        Speedway SuperAmerica LLC
                                                                       2008 annual sales:
                                                                         Approximately 3 billion gallons of gasoline
                                                                         262 million gallons of diesel fuel
                                                                         $2.8 billion merchandise sales
                                                                       2008 daily sales:
                                                                         Serves more than 2 million customers daily
                                                                         8.1 million gallons of gasoline daily
             SuperAmerica franchised stores.
            (1)
                                                                       Approximately 1,600 convenience stores
                                                                           (as of October 2008)(1)
                                                                       Located in 9 states




                                     learn more about Speedway SuperAmerica, please visit our Web site at
                                    To
                               www.speedway.com and for store locations, www.speedway.com/PrintStoreRoster.asp
Corporate Responsibility
Environment
Marathon Petroleum Company is committed to
environmental stewardship. As a company that is
dependent on natural resources, MPC recognizes the
value of protecting the environment. MPC facilities are
consistently recognized for their efforts in this area.

Health/Safety
Optimizing health and safety performance are integral
parts of MPC’s vision and success. A safe working
environment makes employees more productive, because
they feel more comfortable at work, knowing they will
return home to their family and friends in the same
condition that they left each day.
Corporate Responsibility
EEO/Diversity
An equal opportunity employer, MPC recognizes its strength is in its
people. The company values diversity and respects the individual.
MPC strives to attract, develop and retain a highly talented and
diverse work force and offers competitive, challenging career
opportunities. It is the company’s policy to comply with all applicable
laws and regulations concerning the prohibition of discrimination in
employment.

Community Involvement
MPC is proud to be an active part of the communities where it
operates, supporting many local charities and programs, including
the United Way. The company also contributes to numerous
universities and educational institutions. MPC’s culture is to give
more than monetary support, however. Employees volunteer time,
talents and hard work to help create a better quality of life for
everyone in MPC communities.
Corporate Responsibility
Ethics and Integrity
Business integrity and ethics have long been guiding principles of
the company. MPC is committed to high ethical standards in all
areas of business. MPC is privileged to do business in many
communities; as members of those communities, the company
must act with integrity and responsibility. As such, MPC has joined
with Marathon Oil Company to establish a Business Integrity office
that oversees the Code of Business Conduct, promotes business
ethics awareness through education and training, and operates an
employee “Helpline” for reporting suspected illegal conduct and
to answer employee questions and concerns.
Glossary of Common
Petroleum Terms
Alternative Fuel
 fuel other than conventional petroleum-based fuel. Includes
Any
ethanol, biodiesel, methanol, natural gas, propane, hydrogen,
biomass and electricity.
Anomaly
An irregularity in a pipe due to damage or a defect in the pipe. Also
used to describe unusual supply and demand movements.
API Gravity
An arbitrary scale defined as: degrees API gravity equals 141.5
divided by specific gravity minus 131.5. The API gravity of water is
10.0. Less dense liquid fluids have API gravities greater than 10.0.
Backwardation
A market situation in which market prices are expected to be lower
in future months than today (opposite of contango).
Glossary of Common
Petroleum Terms
Barrel
A volumetric unit of measure for crude oil and petroleum products,
derived by the original use of spent whiskey barrels to hold oil in
the 1800s. One barrel equals 42 U.S. gallons.
Barrel-Mile
A unit of measurement of pipeline shipment of product that
signifies one barrel moved one mile.
Barrels Per Calendar Day (BPCD)
The amount of input that can be processed under usual operating
conditions. The amount is expressed in terms of capacity during a
24-hour period averaged over an entire year. It incorporates typical
rate reductions for planned maintenance and other normal
operating activities.
Barrels Per Stream Day (BPSD)
The average number of oil barrels of input processed within a 24-
Glossary of Common
Petroleum Terms
Batch
A shipment of a single product that is handled through the pipeline
without mixing with preceding or following shipments.
Biodiesel
A renewable fuel for diesel engines that is derived from natural oils
such as soybean oil and that meets ASTM D 6751 standards.
Butanes
Low boiling point hydrocarbons used for gasoline vapor pressure
control.
Coking
A refining process for thermally converting and upgrading heavy
residual into lighter products and petroleum coke.
Contango
A market situation in which market prices are expected to be
higher in future months than today (the opposite of
backwardation).
Glossary of Common
Petroleum Terms
Crack Spreads
The dollar per barrel values of a product or group of products
versus the crude cost, excluding transportation and manufacturing
costs. Crack spreads are used as a proxy to estimate the gross
margin for processing a barrel of crude oil in a refinery.
Cracking
A refining process under which heavy molecular weight
hydrocarbons are broken up into light hydrocarbon molecules by
the application of heat and pressure, with or without the use of
catalysts.
Dealer
A generic term referring to a retail service station or convenience
store operator usually affiliated with a brand identity or program. A
dealer typically leases the facility from a refiner or jobber.
Glossary of Common
Petroleum Terms
Downstream
The segment of the oil industry involved in the refining,
transportation and marketing of products.
Ethanol
 alternative fuel derived from soft starches such as corn or from
An
cellulose plant fiber. Ethanol-blended fuels in excess of 10 percent
ethanol can only be used in Flex-Fuel vehicles.
Exchange Contract
A contractual agreement with another product supplier whereby we
deliver a product at a given point in a given quantity for a given
period of time and we receive a like product at a given point in a
reciprocal quantity for the same period of time. At times the
exchange is not valued equally and one party owes the other
money as well.
E-10
 containing 10% ethanol and 90% conventional gasoline.
Fuel
Glossary of Common
Petroleum Terms
E-85
 containing 85% ethanol and 15% conventional gasoline. (May
Fuel
change slightly during
winter months.)
Feedstock
Inputs to refining or gasoline blending, other than crude oil,
includes butanes, gas oil and natural gasoline.
Gasohol

A blend of finished gasoline that contains ethanol.
Gas Oil
Material heavier than distillate and lighter than heavy fuel oil or
asphalt. Cracked into gasoline and distillate-range products.
Glossary of Common
Petroleum Terms
Hydrotreater
The purpose of this unit is to reduces the sulfur and nitrogen
contents of the feedstock and to improve the combustion
characteristics of the transportation fuels. In addition to sulfur and
nitrogen removal, hydrotreating reduces the amount of aromatic
hydrocarbons that can give jet kerosene a poor smoke point and
diesel fuel a poor cetane number.
Hypermarts
A term referring to large retail stores and/or supermarkets that have a
gasoline offering in their parking lots, perhaps as a loss leader. Also
referred to as “big box” retailers.
IMP Rule
Integrity Management Plan Rule. Nickname for a rule published by
the Office of Pipeline Safety entitled "Pipeline Integrity Management
in High Consequence Areas.” The rule requires that the integrity of
pipeline systems be managed through testing, maintenance and
evaluations of releases, third party damage and other relevant data.
Glossary of Common
Petroleum Terms
Independent Marketer
A retail petroleum “seller” or wholesaler, who is not involved in the
refining of petroleum products and therefore must purchase its
supply of petroleum products from a refiner or other supplier.
Jobber (Brand)
Customers who enter into a Product Supply Agreement with MPC
in which MPC agrees to supply and the customer agrees to
purchase Marathon Branded motor fuels at MPC terminals for use
in stations where MPC has given permission to use its name and
trademarks. The service stations may be owned/operated directly
by the jobber, leased by the jobber to another operator, or
owned/operated by some 3rd party. These locations are called
“jobber-dealers.” The jobber typically arranges his own
scheduling and transportation of product.
Glossary of Common
Petroleum Terms
Lessee Dealer (Brand)
Individuals who lease one of MPC’s company owned service
stations in Ohio, Michigan, Indiana or Illinois. Each lessee dealer is
an independent businessman, making decisions concerning the
day-to-day operations of the station, including street pricing.
Light Products
The group of petroleum products with lower boiling temperatures,
including gasoline and distillate fuels.
Natural Gasoline
Gasoline boiling range material co-produced with natural gas.
Used for refinery feedstock and gasoline blending.
Octane Number
A rating, which is the average of the motor octane and research
octane of a fuel sample, used to indicate gasoline’s anti-knock
performance in motor vehicle engines. The higher the octane
number, the higher the resistance to engine knock.
Glossary of Common
Petroleum Terms
Oxygenate
Oxygen-containing blend stocks favored for their octane and their
clean burning quality. Includes ethanol.
PADD
Petroleum Allocation for Defense District. A group of five
geographic areas in the U.S. used in reference to petroleum
distribution, created in 1950 by the Petroleum Administration for
Defense. These districts were originally defined during World War II
for purposes of administering oil allocation.
Products Terminal
A facility used primarily for the storage and/or marketing of
petroleum products that would generally have a total bulk storage
capacity of 50,000 barrels or more. It typically receives
petroleum products by tanker, barge or pipeline and serves as a
loading facility for trucks to transport products to stores, stations
and smaller bulk distribution plants.
Glossary of Common
Petroleum Terms
Proration
(Also known as an allocation.) A temporary limit on the amount of
product customers can purchase at the terminal, usually based on
contracts. Used to protect inventories in time of shortage. Can also
refer to a limit on the amount of product that can be shipped on a
pipeline during a specific period of time by a supplier.
PSI
Pounds per square inch. Common measure of pressure.
Pump Price
The self-serve price, including taxes, posted for either gasoline or
diesel fuel at a station or store.
RBOB
RBOB is the acronym for Reformulated Blendstocks for Oxygen
Blending. RBOB combined with ethanol makes what we call RFE
(Reformulated gasoline with ethanol).
Glossary of Common
Petroleum Terms
RVP
Reid Vapor Pressure. This is the vapor pressure of gasoline under
a closed vessel at 100 degrees Fahrenheit. Summer months require
a lower RVP so gasoline does not evaporate before it can combust
in a gasoline engine. Winter months require a higher RVP so
gasoline does not vapor lock before it can combust in a gasoline
engine.
Rack
Refers to the loading area or point of sale from which trucks pick
up products at a terminal to transport to other destinations.
Rack Pricing
Price to branded and unbranded customers for purchases of
petroleum products at the terminal, typically with the customer
arranging and paying for transportation.
Glossary of Common
Petroleum Terms
Refiner's Margin
Typically, the difference between the spot price of a light product,
such as gasoline, and the price of crude oil.
Reformulated Gasoline
Gasoline with a different composition from conventional gasoline
that reduces air
pollutants.
Resale
The simultaneous purchase and sale of products or crude oil to
improve profitability by capturing timing, location and/or grade
differentials.
Retail Margin
 difference between the cost to acquire product at wholesale
The
(including applicable taxes and the cost of secondary
transportation) and the selling price of the product at street
locations (store or station).
Glossary of Common
Petroleum Terms
Right-of-way
A strip of land usually from 50 to 80 feet wide on which permission
has been granted by landowners for the construction/maintenance
of a pipeline.
ROCE
Return on capital employed is a measure of how productively the
company manages its assets. ROCE is the ratio of after tax profits
generated to the amount of operating capital invested.
Sellers (Brand)
Own their single-site location, but use MPC’s capital investment
dollars and the business consulting services of its marketing
representatives. Like the Lessee Dealer, each Seller is an
independent businessman, making their own day-to-day operating
decisions. They operate in Ohio, Michigan, Indiana or Illinois.
Glossary of Common
Petroleum Terms
Smart Pig
An internal inspection tool used in the pipeline industry to detect
anomalies or irregularities on the walls of a pipeline.
SMYS
Specified Minimum Yield Strength. Identifies the mill property of a
pipe showing its strength.
Specific Gravity
The ratio of a liquid’s density compared to water. A liquid with a
specific gravity less than one is less dense than water.
Spot Price
The price for a one-time open market transaction for immediate
delivery of a specific quantity of product at a specific location
where the commodity is purchased "on the spot" at current
market rates.
Glossary of Common
Petroleum Terms
Sour/Sweet Crude
Designation which describes the degree of a given crude’s sulfur
content. Sour refers to high-sulfur and sweet to low-sulfur.
Throughput
A volumetric rate measuring the flow of crude or products through
a system over time.
Turnaround
Period during which equipment is shut down for mechanical
inspection and/or mechanical maintenance.
Upstream
The segment of the oil industry involved in the exploration and/or
production of crude oil.
Glossary of Common
Petroleum Terms
VOC
Volatile Organic Compounds. VOC is most commonly used when
describing the summer gasoline season. This is the time of year
when the Clean Air Act of 1990 requires reduced VOC emissions in
gasoline in order to maintain air quality.
VRU
Vapor Recovery Unit. A VRU captures vapors from empty transport
trucks that are pushed out of the truck tank during the loading
process. Some units actually recover the vapors, convert them to a
liquid state through various means and return the product to a tank
within the terminal tank farm. Other units, called vapor
combustors, burn the vapors in a flare.
WTI
West Texas Intermediate crude oil. The WTI spot price of crude is
reported from Cushing, Oklahoma.

				
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Description: Ohio Retail Limited Liability Company Operating Agreement document sample