Shell Canada is looking at other potential acquisitions to expand its retail fuel footprint across the country after announcing the purchase of 56 gas stations from Sobeys’ parent company on Thursday.
“We’re always looking,” Kent Martin, general manager of mobility for the Canadian unit of British energy giant Shell, said in an interview.
“If there are other sites and other networks that would be suitable not only for the Shell mobile business but for our integrated business, we would certainly consider those.”
Shell Canada and Empire Co. Ltd., the parent company of Sobeys, announced Thursday that Shell will acquire 56 Empire-owned gas stations in western Canada for about $100 million in cash.
Martin said the deal was in line with Shell’s efforts to expand its retail fuel network globally in preparation for the coming energy transition.
“We are expanding our footprint, which not only allows us to meet the needs of Canadian customers and motorists today, but also provides us with a great opportunity to expand additional fuel supply and low-carbon fuels in these regions in the future supply,” he said.
Martin said Shell forecast gasoline demand would decline in the long-term in favor of cleaner fuels and electric vehicles.
The company thinks it can hedge those losses by not only preparing to one day offer motorists hydrogen-based and renewable fuel products, but also by beefing up its convenience store offerings so that drivers who stop charging their EVs spend more on food and other items. many.
This is the same strategy employed by other major fuel retailers. Parkland Corp. announced earlier this month that it will install 50 ultra-fast charging stations across its Chevron and On The Run retail portfolio in British Columbia and Alberta.
Like Shell, Parkland is investing in the customer experience, betting that EV drivers will spend money on food and retail while they wait for their cars to charge.
Suncor Energy also announced that it is targeting electric vehicle charging as part of a larger plan to boost revenue for its Canadian petroleum retail network and offset an expected future decline in gasoline sales.
Earlier this year, Suncor said it was considering selling Petro-Canada. But the company said in November that a strategic review concluded that Suncor’s best option was to invest in partnerships in nonfuel-related businesses, such as fast food restaurants, convenience stores and loyalty partnerships. Keep and “maximize” the chain.
Suncor also said it had concluded it was unlikely to find a buyer willing to acquire the entire chain or pay the “premium valuation” it believed its retail chain was worth.
On Thursday, Martin said Shell did have some early interest in Petro-Canada, but the discussions never progressed.
“The Petro-Canada network is very strong, so there will definitely be interest in some of these assets. There’s no doubt about it,” he said. “But we haven’t reached the point of any deep engagement yet.”
With regard to the newly acquired Empire petrol stations, Martin said Shell’s current focus will be on rebranding the stations and ensuring they meet Shell standards. But he said the company would also evaluate all new sites for potential upgrades and enhancements.
Martin added that because Shell has a strong presence in Europe, where EV adoption is faster than in North America, the company has a strong sense of what the gas station of the future will look like.
“It’s important to have a very compelling retail offering . . . so things like strong Wi-Fi offerings, great coffee, areas where customers can hang out in the store,” Martin said.
“We also do see a future with only pure electric vehicle hubs. I think we’ll see these pop up in Canada in the near future. We’re seeing these in Europe, and that’s going to be part of the mobility space for us as well.”
The Canadian Press report was first published on December 15, 2022.