Mike Patel knew little about Valero more than 18 months ago, when Don Bowers of Superior Petroleum Co., Pittsburgh, suggested the brand for Patel's gasoline-convenience store in Washington, Pa. "He told me Valero was a big company and that it was [image-nocss] looking to expand into the area," Patel, who already was operating a BP/Co-Gos gasoline-c-store combination in nearby Houston, Pa., told the newspaper.
With BP, Sunoco and ExxonMobil locations already nearby the former GetGo location, Patel took gasoline distributor Bowers' suggestion and opened Western Pennsylvania's first Valero-branded station on New Year's Day 2008.
Valero, North America's largest independent crude-oil refiner, is rapidly growing its retail business, said the report, primarily through third-party distributors, such as Superior Petroleum, which either own their own retail facilities or contract with an independent operator.
"We consider Western Pennsylvania a very desirable market," Joe Maratea, Valero's vice president of wholesale marketing for the North Region, which includes Pennsylvania, told the paper. "We hope to have between 30 and 40 locations open this time next year."
Brian Youngberg, an energy analyst who follows the company for Edward Jones & Co. of Des Peres, Mo., told the paper, "Even though retail is a very small portion of its operations, it's been very profitable for Valero. Refining is responsible for about 90% of Valero's earnings, but retailing provides a nice complement to that business. And it provides an outlet for some of its finished product."
One reason Valero likes Western Pennsylvania is that the region is connected via its own pipeline to its Delaware City, Del., refinery. A portion of the refinery's 8.8-million-gallons-per-day capacity flows to the region.
"I was looking for a third brand to distributeafter BP and CITGOafter CITGO told us two years ago, without explanation, it no longer wanted to brand more stations," Bowers said. He called an old friend who worked for Valero, liked what he heard about its expansion plans and signed on.
Valero has been a part of the retail gasoline business since only 2000, when it acquired a California refinery and 80 retail sites in the San Francisco Bay area, as well as 270 wholesale locations throughout California. Today, the Valero logo hangs above nearly 5,000 locations in 44 states. The company also sells what Maratea calls a "significant amount" of unbranded Valero product to other retailers nationwide.
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