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Table of Contents l Refining4 l Marathon Supply5 l Terminal,Transport & Marine6 l Marathon Pipe Line LLC7 l Brand Marketing8 l Sales & Marketing9 l Speedway.

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Presentation on theme: "Table of Contents l Refining4 l Marathon Supply5 l Terminal,Transport & Marine6 l Marathon Pipe Line LLC7 l Brand Marketing8 l Sales & Marketing9 l Speedway."— Presentation transcript:

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2 Table of Contents l Refining4 l Marathon Supply5 l Terminal,Transport & Marine6 l Marathon Pipe Line LLC7 l Brand Marketing8 l Sales & Marketing9 l Speedway SuperAmerica LLC10 l Corporate Responsibility11-13 l Glossary14-31 Slide # Information current as of December 2009 Slide Number

3 Based in Findlay, Ohio, Marathon Petroleum Company LLC (Marathon) is the nations fifth largest transportation fuels refiner with 1,188,000 barrels-per-day capacity in its seven- refinery system. Marathons retail marketing system comprises approximately 6,200 locations in 19 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 86 light product and asphalt terminals. The Company owns, operates, leases or has ownership interest in about 10,000 miles of pipeline. Marathon Petroleum Company 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. ®

4 Refining Total refining capacity: 1,118,000 BPCD; Approximately 7% of total U.S. Capacity Crude throughput in 2009: 957,000 BPCD Feedstock/Blendstock Inputs: 196,000 BPCD Marketing in 2009: (1)Consolidated Refined Product Sales: 21.1 billion gallons (2)Consolidated Refined Product Purchases: 3.2 billion gallons BPCD= barrels per calendar day (1) Total Company sales (2) MPC plus SSA 3rd party purchases St. Paul Park: 74,000 BPCD Robinson: 206,000 BPCD Texas City: 76,000 BPCD Garyville: 436,000 BPCD Catlettsburg: 212,000 BPCD Canton: 78,000 BPCD Detroit: 106,000 BPCD

5 Marathon Supply Crude Oil Supply Product Purchases Ethanol: Marathon has more than 20 years history of blending with gasoline. Ethanol volumes sold in blended gasoline were 60 MGPD* in 2009. Has the capacity to blend E-10 across its entire gasoline distribution network.. Has interest in two 110 (MMGPY)** ethanol facilities: Clymers, Ind. (35%) and Greenville, Ohio (50%). Biodiesel Fuel: Sell biodiesel in Minnesota, Illinois, and Kentucky. Canadian 14% Foreign 22% (Saudi Arabia, Kuwait, Mexico) Domestic 64% Other 1% Distillate 18% Alternative Fuels 35% Gasoline 46% Fuel Oil 3% Foreign 36% (Aruba, Mexico, Venezuela, Other) Domestic 61% Feedstock Supply *Thousand barrels per day ** million gallon per day Canadian 3%

6 Terminal, Transport & Marine 64 owned or operated (1) and 60 third-party (gasoline, diesel, kerosene, jet fuel) 1.4 MMBPCD (2) light product throughput 147 MBPCD (3) light products delivered via MPC trucks 22 owned or operated(1) and 11 leased heavy oil, coke and asphalt (4) terminals 102.5 MBPD of asphalt refining capacity 45 MBPCD asphalt terminal throughput 125 owned transport trucks 267 transport loading racks 16 inland waterway tow boats and 183 barges owned 412 MBPCD light products, heavy oils, asphalt, feedstocks and chemicals transported by Marine Approximately 2,400 owned or leased railcars (1) Includes refinery-owned loading racks at Canton, Ohio, and St. Paul Park, Minn. (2) Million barrels per calendar day (3) Thousand barrels per calendar day (4) Operated seasonally MPC Owned Asphalt/Heavy Oil Terminals Light Product Terminals MPC Owned Part Owner Water Supplied Terminals CoastalInland MPC Leased Exchanged/Throughput

7 Marathon Pipe Line LLC Downstream owns, operates, leases or has ownership interest in 71 pipeline systems in 16 states and federal waters with approximately 10,000 miles of pipeline including interest in Capline, LOOP LLC, LOCAP LLC, Explorer, Wolverine Minnesota and Muskegon systems. Operates Centennial Pipeline LLC, a joint venture that stretches 800 miles from Texas to Illinois. Delivers more than 111 million gallons per day of crude oil and petroleum products. MPC Owned & Operated MPC Interest; Operated by MPC MPC Interest; Operated by Others Pipelines Used by MPC

8 Brand Marketing 2009 sales: 3.7 billion gallons 4,613 outlets Located in 18 states (as of Dec. 2009) Brand Jobber Dealer Locations 204 86 894 31 79 516 94 133 161 64 278 78 95 641 789 468 To learn more about Marathon Brand Marketing, please visit our website at www.marathonpetroleum.com and for station locations, go to www.marathonpetroleum.com/stations/ ® 1 1

9 Marketing Retail Marathons retail marketing system (Marathon Brand and Speedway SuperAmerica), comprises approximately 6,200 locations in 19 states. Wholesale One of the largest wholesale suppliers of gasoline and distillate within its market area. Asphalt, Heavy Oil and Coke Averaging 108 MBPCD production. One of the largest domestic asphalt producers. Special Products Markets propane, propylene, cumene, benzene, toluene, xylene, dilute naphthalene oil, molten sulfur, and maleic anhydride. Sales 1,188 MBPCD* Commodity Group Asphalt 6% Special Products 5% Distillate 27% Gasoline 59% Asphalt & Heavy Fuel Oil 9% Special Products & Feedstocks 5% Marathon Brand 20% Speedway 18% Wholesale 48% These values are based on 2009 actual data. *MBPCD = thousand barrels per calendar day. Excludes sales by Marathons Supply, Distribution and Planning organization. Heavy Fuel Oil/Coke 3% Marketing Group

10 Speedway SuperAmerica LLC 2009 annual sales: Approximately 3 billion gallons of gasoline 260 million gallons of diesel fuel $3.1 billion merchandise sales 2009 daily sales: Serves more than 2.5 million customers daily 8.1 million gallons of gasoline daily Approximately 1,600 convenience stores (as of October 2009 ) Located in 9 states 221 470 61 131 74 236 311 97 2 To learn more about Speedway SuperAmerica, please visit our Web site at www.speedway.com and for store locations, www.speedway.com/PrintStoreRoster.asp ®

11 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 MPCs 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.

12 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 companys 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. MPCs 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.

13 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.

14 Glossary of Common Petroleum Terms Alternative Fuel Any fuel other than conventional petroleum-based fuel. Includes 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).

15 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- hour period.

16 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).

17 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.

18 Glossary of Common Petroleum Terms Downstream The segment of the oil industry involved in the refining, transportation and marketing of products. Ethanol An alternative fuel derived from soft starches such as corn or from 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 Fuel containing 10% ethanol and 90% conventional gasoline.

19 Glossary of Common Petroleum Terms E-85 Fuel containing 85% ethanol and 15% conventional gasoline. (May 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.

20 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.

21 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.

22 Glossary of Common Petroleum Terms Lessee Dealer (Brand) Individuals who lease one of MPCs 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 gasolines anti-knock performance in motor vehicle engines. The higher the octane number, the higher the resistance to engine knock.

23 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.

24 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).

25 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.

26 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 The difference between the cost to acquire product at wholesale (including applicable taxes and the cost of secondary transportation) and the selling price of the product at street locations (store or station).

27 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 MPCs 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.

28 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 liquids 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.

29 Glossary of Common Petroleum Terms Sour/Sweet Crude Designation which describes the degree of a given crudes 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.

30 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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