Many oil refineries are constructed near major cities, but still require additional logistics to efficiently deliver refined products (i.e. gasoline and diesel) to local service stations. Some refineries can ship products directly to a gas station through their own on-site Terminal, but many refiners rely on product pipelines to ship finished product to off-site terminals.

Everyone surely has seen tanker trucks transport fuel to a gas station, but many do not realize that most of these tanker trucks fill up at terminals instead of the actual oil refinery. Terminals are not as hazardous to the community as refineries, so many terminals can be placed in close proximity to population centers.

Terminals are just a collection of storage tanks and truck offloading facilities, so they can enable convenient resupply of local gas stations. An oil refinery produces gasoline, jet, and diesel, and ships the products underground through product pipelines to these terminals. Small tanker trucks can then load products from terminals and distribute fuel to various service stations over several quick round trips.

Product pipelines are particularly interesting because one pipeline can carry many different types of products (gasoline vs diesel) and also many different grades of products (premium gasoline vs regular gasoline). An observant person may ask “well, how can you ship different types of products and not mix them all up”? The answer lies in the product shipping order sequence and the pumping rates.