Wawa Entering CNG Business

Partnering with N.J. utility to open first compressed natural gas site in early 2015

Samantha Oller, Senior Editor/Fuels, CSP

South Jersey Gas Wawa CNG Deal (CSP Daily News / CSPnet / Convenience Store Petroleum)

WAWA, Pa. -- Another large convenience store chain has entered the compressed-natural-gas (CNG) business, as Wawa Inc. has announced a new partnership with a New Jersey utility to open its first CNG fueling site in the southern part of the state.

The c-store retailer is partnering with South Jersey Gas, a subsidiary of South Jersey Industries, to open CNG fueling sites at Wawa's Logan Township, N.J., store, which is located off of exit 10 of Route 295, within the Pureland Industrial Complex.

This partnership model between Wawa and the utility, which has reportedly been in the works for the past year, is similar to one between Speedway LLC and local natural-gas providers as it plans several CNG sites in its Midwest footprint.

Infrastructure for the Wawa CNG site is slated to be ready by early 2015. Wawa and South Jersey Gas are considering additional sites, although they have not named any specific markets. The retailer has more than 200 locations in New Jersey, with most in the southern part of the state. Wawa plans to open five stores per year in northern New Jersey over the next decade.

While cautious in its pace, Wawa has expressed interest in alternative fuels such as CNG before. In an interview with CSP in 2012, then incoming CEO Chris Gheysens shared that the company was building all new sites with extra conduit as well as consideration for where dryers and other CNG fueling equipment could go.

"It's not perfect, but it's a little bit of upfront cost to at least provide us some flexibility," he told CSP at the time.

"Wawa is pleased to offer compressed natural gas for the first time to our customers at our Logan Township store," said Brian Schaller, vice president of fuel for Wawa, in announcing the new partnership, which he described as the first of its kind for the region. "This joint project with South Jersey Gas is another step in the evolution of Wawa's fuel offer, providing an alternative that is cheaper, cleaner and domestically available. Compressed natural gas provides an opportunity to increase the value of our fuel and convenience offer to the customer, and positions us for the future. We are excited about the growth potential of this alternative fuel."

"We're very excited to begin this joint project with Wawa as it's a natural extension of the growth within our CNG business line," said Jeffrey E. DuBois, president of South Jersey Gas. "This initiative will build greater faith among the general public in natural gas as a reliable, cost-effective and environmentally friendly transportation fuel source. With compressed natural gas costing approximately one-third less than gasoline at the pump and producing up to 30% less greenhouse-gas emissions compared to diesel- and gasoline-powered vehicles, the market for customers to make the switch to CNG, particularly fleet vehicles, is plentiful."

There are more than 100,000 natural gas vehicles running on CNG that are operating in the United States today, most of these fleet vehicles.

Folsom, N.J.-based South Jersey Gas provides natural gas service to more than 362,000 residential, commercial and industrial customers in Atlantic, Cape May, Cumberland and Salem, as well as large parts of Gloucester, Burlington and Camden counties in New Jersey.

Privately held Wawa Inc., based in Wawa, Pa., has more than 650 c-stores in New Jersey, Pennsylvania, Delaware, Maryland, Virginia and Florida. The stores offer a large fresh foodservice selection, including made-to-order hoagies, hot breakfast sandwiches and specialty beverages.

Part of CSP's 2014 Convenience Top 101 retailers