CALGARY – Fast-growing Parkland Fuel Corp. (TSX:PKI) has struck a $1.5-billion deal to buy Chevron Canada’s downstream fuel business, including 129 retail gas stations in the Vancouver area and the Chevron refinery in Burnaby, B.C.
The Red Deer, Alta.-based company says the new stations will complement its existing 44 Chevron-branded sites in British Columbia and cement its position as one of Canada’s largest fuel retailers with more than 1,800 service stations.
The sale also involves 37 commercial cardlock and three marine fuelling locations, as well as three terminals in B.C. and a wholesale business that includes aviation fuel sales to the Vancouver International Airport.
“I believe we’ve found an opportunity that is an ideal next step for Parkland on its growth trajectory,” said CEO Bob Espey on a conference call.
“I’m certainly excited for the road ahead for Parkland.”
He said the acquisition will support Parkland’s existing operations in B.C., leading to between $35 million and $50 million in annual operating cost savings within three years.
The purchase of the refinery gives Parkland access to the Trans Mountain oil pipeline from Alberta as well as a marine dock on Burrard Inlet that will open new opportunities in fuel imports and exports, Espey said.
Parkland plans to issue 24 million shares to raise $660 million to help finance the Chevron purchase, which is expected to close at the end of the year.
In August, Parkland announced it would pay about US$750 million to acquire the Canadian retail fuel assets of Texas-based CST Brands.
Last March, Parkland bought Esso stations in Saskatchewan and Manitoba as part of a deal by Imperial Oil to sell its remaining 497 Esso retail stations in Canada to five fuel distributors for $2.8 billion.
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Note to readers: This is a corrected story. A previous version incorrectly stated that the deal will close in the second quarter of 2017.