Pilot Flying J To Acquire Maxum Petroleum
Calumet Acquires Royal Purple
Flint Hills To Shut Part of North Pole Refinery
Shell, TravelCenters of America Sign LNG Deal
ExxonMobil To Pay Montana $1.6 Million
FleetCor Continues International Growth

PILOT FLYING J TO ACQUIRE MAXUM PETROLEUM

KNOXVILLE, TN. — Pilot Flying J has announced that it will acquire a controlling interest Maxum Petroleum, the petroleum marketer and distributor with offices nationwide and substantial coverage in the West.

Following the acquisition, Maxum will continue to operate as an independent stand-alone business under the leadership of CEO Perot Bissell.

Based in Greenwich, CT., Maxum had expanded across the country over the last several years with a series of strategic acquisitions, including GP Resources of Rancho Dominguez, CA., Ranier Petroleum's marine operations in Seattle, WA., CL Bryant in Fresno, CA., and Canyon State Oil of Phoenix, AZ.

As part of the deal to acquire Maxum, Pilot Flying J will move its recent acquisition, Western Petroleum, into the Maxum division.

Western Petroleum, based in Vernal, UT., operates primarily in the Rocky Mountains, Midwest, and South. It had been acquired by Pilot Flying J earlier this year.

In an official announcement, it was reported that the current investors in Maxum, including Metalmark Capital, Waud Capital Partners, and Maxum Petroleum itself will "re-invest in the new venture" with Pilot Flying J.

"The acquisition of Maxum offers us an excellent growth opportunity and we are very excited to increase our participation in this industry" said Pilot Flying J President and CEO Jimmy Haslam, announcing the deal. "Maxum's management team and talented workforce have demonstrated commitment and leadership in executing their business plan and delivering value to their customers and suppliers."

"The management team of Maxum Petroleum is very pleased to have Pilot Flying J as a partner," said Maxum CEO Bissell. "Pilot Flying J's investment in our business is a strong validation of the strategy and vision we have been pursuing since 2004. We will continue to provide our customers with high quality and reliable delivery with a strong focus on value added services and solving our customers' unique logistics requirements."

He continued, "We are also delighted to welcome the Western Petroleum team to Maxum. The addition of Western Petroleum's people and network of logistics assets will be a strong addition to our distribution platform."

The closing of the acquisition is subject to government approval.

CALUMET ACQUIRES ROYAL PURPLE

INDIANAPOLIS, IN. — Lubricant manufacturer Calumet Specialty Products Partners, L.P. announced that they have signed a definitive agreement to acquire Royal Purple, Inc. The price tag on the deal was reportedly $335 million.

Royal Purple manufactures "high performance lubricants primarily for automotive, industrial, marine, motorcycle and racing applications."

"Calumet is very excited to be doing this acquisition," said Calumet president and COO Jennifer Straumins. "This is a great asset to add to our asset base."

Straumins continued, "They sell to a very diverse customer base in the oil and gas, chemical and refining, power generation, manufacturing and transportation, food and drug manufacturing and automotive aftermarket end markets. Royal Purple and Calumet share a strong customer base and that will lead to substantial marketing synergies between the two companies."

She added, "Our growth strategy has been and will continue to be to acquire niche assets that, again, major oil companies no longer desire to have. We strive to acquire assets that support the stability of cash flows, and this Royal Purple acquisition will do just that. They have had very, very stable and growing cash flows over the whole time that they have been in existence."

With the addition of Royal Purple, Calumet will add approximately 100 new employees to the company operations. As part of that staff, the Royal Purple management has agreed to join Calumet.

The sale was expected to close by the end of July, subject to regulatory approval.

FLINT HILLS TO SHUT PART OF NORTH POLE REFINERY

WICHITA, KS. — Flint Hills Resources Alaska has announced that it plans to idle one of the units at its Alaska refinery "due to challenging economics and rising crude prices."

The refinery, located in North Pole, AK., has a capacity of 220,000 barrels per day. Sixty percent of the refinery's production is jet fuel and the facility is a major source of fuel for the Ted Stevens Anchorage International Airport.

"This is the most difficult decision we have had to make in operating this refinery," said Mike Brose, vice president of Alaska operations and manager of the refinery, announcing the closure.

"The North Pole refinery was designed to use crude oil as a source of energy to power operations which is a considerable disadvantage," Brose said, noting that Alaska North Slope crude prices have been high in recent history and are "expected to remain that way."

Brose said the North Pole Refinery needs to solve its supply and pricing problems "in order to survive, and a single unit crude unit configuration gives us the best platform to work on these problems."

Flint Hills says that it should be able to "meet all its contractual commitments" for jet fuel, gasoline, and some specialty fuels operating only the single refinery unit.

SHELL, TRAVELCENTERS OF AMERICA SIGN LNG DEAL

HOUSTON, TX. — Shell and TravelCenters of America have signed a deal to sell liquefied natural gas at approximately 100 TA and Petro Stopping Center sites across the United States.

According to the deal, over 200 LNG fuel lanes will be added to the truck stops, with the first scheduled to be operational in 2013.

"Using natural gas for transport gives truck fleet operators a new strong advantage because it's abundant and affordable and a viable alternative to diesel," said Elen Phillips, vice president, Shell Fuels Sales & Marketing North America, announcing the deal. "This potential alliance with TA would enable Shell to deliver LNG fuel to customers who want a competitively priced fuel option to help them meet increasingly stringent air quality emission standards."

Shell had already signed a similar supply deal with Flying J last year; the company's first truck stop retailing LNG is slated to open later this year in Calgary, Alberta, Canada.

"Shell sees great potential for LNG as a fuel option among our range of quality fuels, due to the sheer abundance and affordability of domestic natural gas in North America," stated Phillips. "Where it makes sense and where there is customer demand, we will innovate to deliver LNG as an additional fuel to offer our customers across America."

TravelCenters of America LLC, headquartered in Westlake, OH., has 238 locations in 41 U.S. states and Canada operating under the TravelCenters of America, TA, and Petro Stopping Centers brands.

EXXONMOBIL TO PAY MONTANA $1.6 MILLION

BILLINGS, MT. — ExxonMobil has agreed to pay the state of Montana $1.6 million in water pollution penalties following the company's oil pipeline break last Summer.

An estimated 1,500 barrels of crude oil spilled into the Yellowstone River south of Laurel, MT., at the beginning of last July. It has not been determined what caused the pipeline break but the Yellowstone River was flooding with "very swift river currents" when the accident occurred. The company deployed cleanup crews into an area that extended 144 miles from the spill site; crude was found up to 70 miles along the river.

At the time of the spill, ExxonMobil established a "unified command" to manage response activities, including recovering oil, monitoring air and water quality, and addressing questions from local residents. ExxonMobil coordinated the response with the Environmental Protection Agency; the Montana Department of Environmental Quality; U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration; Montana Fish, Wildlife and Parks; Yellowstone County Disaster and Emergency Services; and Yellowstone County commissioners. The cleanup process took approximately five months. and involved over 280 workers.

The oil company also agreed to pay damages to to the state for "wildlife and the loss of public access" to the Yellowstone River that occurred during the cleanup of the spill. The final cost of those damages is being determined by a joint federal-state investigation which is still underway.

FLEETCOR CONTINUES INTERNATIONAL GROWTH

ATLANTA, GA. — FleetCor Technologies, Inc. has continued its international expansion.

In mid-July, FleetCor completed its acquisition of CTF Technologies, Inc. for $180 million. CTF provides fuel payment processing services for trucking fleets, ships, mining equipment, and railroads in Brazil. More than 3 billion liters of fuel were processed through the CTF system in Brazil in 2011.

At the same time, FleetCor announced that it has acquired "a leading Russian fuel card company." The name of the company and the terms of transaction were not disclosed. FleetCor did say that "The acquired company is the Russian leader in fuel card systems, and serves major oil clients, and hundreds of independent fuel card issuers. Its technology is the standard in Russia, and this compatibility allows issuers to share their retail network, thereby, expanding the reach of their networks. FleetCor estimates that over 30% of all commercial fuel purchased in Russia is processed using this acquired company's system."

"We are delighted to announce this Russian acquisition. The Russia market has great potential, with two-thirds of all commercial fuel still purchased with cash and vouchers. This asset strengthens our already attractive existing position and further signals our commitment to developing markets," said Ron Clarke, chairman and chief executive officer of FleetCor Technologies, Inc.

FleetCor is the parent company of CFN and Mannatec in the petroleum marketing industry.

Originally published in the August 2012 issue of O&A Marketing News.
Copyright 2012 by KAL Publications Inc.