"By providing long-term access to key terminals in the Greater Toronto Area, these agreements significantly enhance our competitive position and will allow us to continue growing [image-nocss] our successful wholesale activities in that market" said Jean Bernier, president of Ultramar. "It will also allow us to optimize the transfer of refined fuels from our world-class Quebec refinery into Ontario via our access to the Trans-Northern Pipelines system between Montreal and Toronto."
He added, "Over the years, Ultramar has grown its wholesale activities in eastern and southern Ontario by being a very competitive and reliable supplier for industrial customers and independent marketers. These new agreements will allow Ultramar to continue growing its operations in the key Greater Toronto market."
Ultramar Ltd., a subsidiary of San Antonio, Texas-based Valero Energy Corp., owns and operates a refinery, whose current production capacity is 265,000 barrels of oil per day, at Levis near Quebec City. It markets gasoline and diesel fuel to a large group of industrial and wholesale customers and via a network of some 900 retail sales outlets and 85 cardlocks, in addition to selling home heating oil to about 140,000 customers. Headquartered in Montreal, Ultramar employs more than 3,700 persons and its refining, distribution and retail sales networks contribute to supporting more than 10,000 jobs.
The Competition Bureau announced last week that Ultramar has been approved as the acquirer of terminal storage and distribution capacity required to be provided by Suncor as part of a remedy addressing competition concerns raised by the Bureau over the merger of Suncor and Petro-Canada.
Ultramar will acquire the capacity under the terms of a consent agreement between the Competition Bureau and Suncor and Petro-Canada signed in July 2009. The bureau required Suncor to supply 1.1 billion liters of terminal and distribution capacity for refined petroleum products in the Greater Toronto Area for a period of 10 years. Suncor has now entered into terminalling agreements with Ultramar for all of that capacity for the full 10-year period.
"The acquisition of terminal storage and distribution capacity by Ultramar is an important milestone," said Melanie Aitken, Commissioner of Competition. "We believe that this agreement will be an effective remedy to the substantial lessening of competition that the Bureau concluded was likely in the market for wholesale gasoline in Southern Ontario and the GTA."
By acquiring long-term access to significant volumes of storage and distribution capacity in the GTA, Ultramar will have the ability to expand its presence in the wholesale market and compete to supply gasoline to independent marketers in southern Ontario. Previous agreements between Suncor and Ultramar for terminal and distribution capacity in the GTA had expired or were about to expire, and were for less capacity than was required to be made available under the consent agreement.
In addition to the obligations concerning terminal storage and distribution capacity, the consent agreement requires Suncor to divest 104 retail gas stations in markets in southern Ontario in which the Bureau concluded that the merger would have potentially lessened competition substantially. The sale process for these retail gas stations is ongoing.
The Competition Bureau is an independent law enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.
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