April 2023 Issue Highlights

BP MAY ACQUIRE TA FOR $1.3 BILLION

HOUSTON, TX. — BP Products North America Inc., has signed a deal to purchase TravelCenters of America for $1.3 billion in cash.

Following the announcement of the agreement, however, ARKO Corporation put forward a higher bid for the travel center chain of $92 per share instead of BP's offer of $86 per share and urged TA stockholders to reject BP's offer.

ARKO's offer for TA would be just under $1.4 billion.

Included in the deal is TA's network of approximately 280 TravelCenters of America sites, strategically located on major highways across 44 states in the United States.

BP officials say they plan to keep the TA staff following the close of the sale.

The travel centers, which average around 25 acres, offer a full range of facilities for vehicles and fleet trucks, including more than 600 full-service and quick service restaurants, as well as truck maintenance and repair services.

Around 70% of TA's total gross margin is generated by its convenience services business, almost double BP's global convenience gross margin.

BP officials say the TA sites would round out its existing wholesale business in the United States, "enabling TA and BP to offer fleets a seamless nationwide service."

BP also noted the purchase will allow the major to "provide options to expand and develop new mobility offers including electric vehicle charging, biofuels, renewable natural gas and later hydrogen, both for passenger vehicles and fleets."

Bernard Looney, CEO of BP, said, "This is BP's strategy in action. We are doing exactly what we said we would, leaning into our transition growth engines. This deal will grow our convenience and mobility footprint across the US and grow earnings with attractive returns.

"By enabling growth in EV charging, biofuels and RNG and later hydrogen, we can help our customers decarbonize their fleets. It's a compelling combination."

BP had previously announced plans to invest $1 billion in EV charging across the United States by 2030. It's now expected if BP is successful in their bid for TA, many of the new charging locations will be at TA Travel Centers.

BALLARD OIL CLOSES AFTER 85 YEARS IN SEATTLE

SEATTLE — Ballard Oil, one of Seattle's oldest family-owned fueling businesses, shut down its operations after decades of struggling against government regulations and local activists.

Warren Aakervik Jr., 79, the second of four generations to run the company, told local reporters there were many reasons to shut down the business including costly regulations, rising taxes, a shortage of workers, a dwindling customer base, and the possibility that the city of Seattle might run the Burke-Gilman [Bicycle] Trail through Aakervik's backyard.

"It's death by a thousand cuts,"said Aakervik. "You keep on, keep on, keep on — and then finally, you just say, 'Why am I beating my head against the wall?'"

Aakervik's grandson, Brandon Millard, had been operating Ballard Oil since 2021. Last year, he sold the company's home heating-oil business. In January, he decided to close the marine fueling operation and on January 30, Ballard Oil sold its last load of diesel to an Alaska-bound trawler and shut off the pumps.

With the departure of Ballard Oil from the Lake Washington Ship Canal, there are only two large marine fueling operations in Seattle: Covich-Williams and Maxum Petroleum.

EXXONMOBIL TO RESTRUCTURE, MOVE HEADQUARTERS

IRVING, TX. — ExxonMobil has announced plans to restructure its company by combining downstream and chemical operations "to better support customers, enhance performance, and grow value."

Effective as of April 1, the company will be organized along three new business lines: ExxonMobil Upstream Company, ExxonMobil Product Solutions and ExxonMobil Low Carbon Solutions. They will be supported by a single technology organization, ExxonMobil Technology and Engineering.

As part of the restructuring, ExxonMobil will relocate its corporate headquarters from Irving, Texas, to its offices north of Houston. The move is expected to be completed by mid-year.

It is expected that the reorganization will lead to job cuts by ExxonMobil but none have been announced.

The Product Solutions division will include ExxonMobil's fuels as well as its chemical, lubricants, fuel additives, plastics, and polymer product manufacturing and marketing.

Karen McKee, formerly president of ExxonMobil Chemical Company, has been appointed to lead ExxonMobil Product Solutions.

Linda DuCharme, formerly president of ExxonMobil Upstream Integrated Solutions and ExxonMobil Upstream Business Development, has been appointed to lead ExxonMobil Technology and Engineering Company.

This change will also consolidate the Upstream into a single organization, ExxonMobil Upstream Company, which will be led by Liam Mallon, formerly president of ExxonMobil Upstream Oil and Gas Company.

USD CLEAN FUELS PLANS NEW BIOFUELS TERMINAL

HOUSTON, TX. — USD Clean Fuels LLC (USDCF) has announced plans to build a new biofuels terminal in National City, CA., outside of San Diego.

The new terminal will have the capability to transload renewable diesel, biodiesel, ethanol and sustainable aviation fuel. The planned terminal would be served by the BNSF Railway and would provide transportation of clean fuels to the area from the Midwest and Gulf Coast.

USD Clean Fuels says "pending receipt of all local and state permits, the terminal is expected to be operational by early 2024."

"We are excited to announce this terminal development for USDCF. It is the second terminal of a growing network of clean fuels terminals that we anticipate will ultimately include California, Oregon, Washington, Canada and the Texas Gulf Coast based on strong customer and railroad interest. These terminals will provide needed infrastructure that will make the downstream logistics of biofuel production and feedstocks more efficient,"said Bob Copher, senior vice president of USD Clean Fuels.

The USD Group currently operates 11 terminals in North America, including Casper, WY., and Colton, CA., in the West.

USD officials say the terminal development is supported by "two signed long-term Terminal Service Agreements." The Terminal Services Agreements provide for the inbound shipment of renewable diesel, biodiesel, ethanol and SAF on rail, self-switching of the rail rack and four truck loading spots.

USD Clean Fuels LLC is owned by its employees, Energy Capital Partners, and Goldman Sachs. The company is based in Houston, TX.

CLEAN ENERGY SIGNS SUPPLY DEAL WITH SAN DIEGO MTS

NEWPORT BEACH, CA. — Clean Energy Fuels Corp. has signed a deal to sell 86 million gallons of RNG to the San Diego Metropolitan Transit System (MTS) to operate its bus fleet.

"San Diego MTS was an early adopter of natural gas in the 1990s and has continued to seek cleaner and more economical fueling options,"said Chad Lindholm senior vice president of Clean Energy. "As a result of the use of RNG the people who live in the San Diego area will have less exposure to greenhouse gas emissions and cleaner air."

MTS serves the San Diego metropolitan area with a fleet of 764 buses — of which 595 run on RNG — that fuel at four private transit stations.

The Clean Energy contract was awarded in January.