Shell in Chi-Town

Aims to be top retail brand in the City of Big Shoulders, metro area

Published in CSP Daily News

By  Steve Dwyer, CSP Reporter

HOUSTON, Texas -- With a plan to become the largest retail brand in the Chicago metro market within five years, Shell Oil Products U.S. said Monday it has signed supply agreements with three prominent, high-volume petroleum companies in northern Illinois. The agreements—the terms of which were not disclosed—are expected to help enable Shell to significantly ramp up its retail presence in northern Illinois, with a stated goal of taking over the top spot in the retail market.

Presently, Shell sports a gasoline market share of about 17% (according to NPD Group market data), with [image-nocss] a goal to expand it to 20% by about 2013, Anne Peebles, a spokesperson for Shell, told CSP Daily News, which first reported the news in a Flash yesterday.

The agreements were forged with Mundelein, Ill.-based Graham Enterprise Inc., St. Charles, Ill.-based Parent Petroleum and Riverside, Ill.-based Texor Petroleum Co. All three fuel firms plan to distribute Shell-branded gasoline to both converted and newly-built retail sites, of which they own and operate. Peebles could not elaborate on whether other similar deals were in the pipeline for Shell.

Although the petroleum companies could not be reached for comment, Thomas Gleitsman, chairman and CEO for Texor, said in a statement that "Shell has been a trusted source of high-quality fuels for more than 100 years. In addition, Shell is committed to providing a bright, clean and comfortable environment for its customers."

Peebles said that she would not be able to provide a definitive number of stations or gallons of fuel involved in the deal. She added that the retail brand conversions of the three companies "have already begun, and will continue to over the next five years." Within the terms of the deal, Shell will provide its own branded fuel to its three companies. Presently, the three petroleum companies have such brands as CITGO, Valero and Mobil.

In a statement, Kevin Autin, retail general manager for the Mid-Continent region, Shell Oil Products U.S., Houston, said that "signing agreements with these leading wholesalers will enable Shell to expand its retail gasoline network to benefit Chicago drivers. These wholesalers are established and growth-oriented retail fuel industry veterans with deep knowledge of the Chicago area."

Graham Enterprise owns and operates 27 convenience locations in the Chicago area, selling approximately 100 million gallons annually under the "Maverick" brand.

With 12 privately owned retail locations, Texor sells 250 million gallons a year encompassing its own locations plus supply arrangements to dealers throughout northern Illinois and northwest Indiana. Parent Petroleum operates an undisclosed number of retail units. Combined, the three wholesalers have about 150 years of experience in the retail fuels industry.

World Fuel Services Corp. recently signed an agreement to acquire the wholesale distribution assets of Texor. Click here to read CSP Daily News coverage.

Separately, Motiva Enterprises LLC said Monday that it is selling 22 Shell-branded gas stations in Fairfield, Conn., about an hour north of Manhattan (see story in this issue of CSP Daily News).