An interesting development has come to light during Marathon Petroleum Corporation's (MPC) third-quarter earnings call several days ago, with MPC's president praising Hess Corp.'s retail network, which is up for sale, as "one of the best looking systems on the East Coast".
Marathon's subsidiary Speedway has recently begun expansion into Tennessee and Pennsylvania, and there have been hints that Speedway could consider purchasing the Hess network.
As for whether Marathon would purchase some or all of Hess' 1,300-plus convenience stores and gas stations, Heminger said his company needs "to see how it plays out." "But we're going to continue to step out with Speedway. I doubt that we will do a leapfrog of several states unless we can do something that has some market density."
In the meantime, Marathon's Speedway division has expanded into western Pennsylvania and Tennessee. "We will continue to 'step out' with Speedway," said Heminger. "We have seen great opportunities to move into these [two] markets."
Concerning the Hess retail network, Heminger said, "I think it would be an excellent fit. We'd be an excellent fit [for Hess] with Speedway. Marathon is the upper side of our business, whereas Speedway is the company-owned and operated side. So we'd be a good fit there."
Findlay, Ohio-based MPC is the nation's fourth-largest refiner, with a crude oil refining capacity of approximately 1.7 million barrels per calendar day in its seven-refinery system. It sells Marathon-brand gasoline through approximately 5,100 independently owned retail outlets across 18 states.
In addition, Speedway LLC, an MPC subsidiary based in Enon, Ohio, owns and operates the nation's fourth-largest convenience store chain, with approximately 1,470 convenience stores in nine states. MPC also owns, leases or has ownership interests in approximately 8,300 miles of pipeline. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership (MLP). MPC's fully integrated system provides operational flexibility to move crude oil, feedstocks and petroleum-related products efficiently through the company's distribution network in the Midwest, Southeast and Gulf Coast regions.