After announcing its purchase of 56 gas stations from parent company Sobeys on Thursday, Shell Canada is on the lookout for other potential acquisitions as it seeks to grow its retail fuel footprint across the country.
“We’re always looking,” Kent Martin, general manager of mobility for the Canadian subsidiary of British energy giant Shell plc, said in an interview.
“If there are other sites and other networks that are not only a good fit for the Shell mobility business but also our integrated business, we are certainly looking at them.”
Shell Canada and Sobeys parent Empire Co. Ltd. announced Thursday Shell’s acquisition of 56 Empire-owned gas stations in Western Canada for about $100 million in cash.
Martin said the deal is in line with Shell plc’s global effort to expand its retail fuel network in preparation for the upcoming energy transition.
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“We are expanding our footprint, and this not only allows us to meet the needs of customers and motorists in Canada today, but also gives us a great opportunity to add additional fuel offerings and low-carbon fuel offerings in the future on this expanding locations,” he said.
Martin said Shell predicted that demand for petrol would decline over the long term in favor of cleaner burning fuels and electric vehicles.
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The company believes it can hedge against those losses by not only preparing to one day offer motorists hydrogen-based and renewable fuel products, but also by improving its convenience store offerings so that drivers who stop to charge their EVs have more food and other items will spend. .
This is the same strategy other major fuel retailers are banking on. 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 BC and Alberta.
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Like Shell, Parkland is also investing in customer experience, betting that EV drivers will spend money on food and retail items while waiting for their car to charge.
Suncor Energy also announced it is targeting EV charging as part of a larger plan to increase revenue from its Petro-Canada retail network, and to offset expected lower gasoline sales in the future.
Suncor indicated earlier this year that it was considering selling Petro-Canada. But the company said in November that a strategic review concluded that Suncor’s best bet would be to retain and “maximize” the chain by investing in partnerships in non-fuel-related businesses such as quick-service restaurants, convenience stores and loyalty partnerships.
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Suncor also said it has concluded it is unlikely to find a buyer willing to acquire the entire chain, or to pay the “premium valuation” the company believes its retail chain is worth.
Martin said Thursday that Shell did have some early interest in Petro-Canada, but discussions never progressed.
“The Petro-Canada network is very strong, so there certainly would have been interest in some of those assets. There is no doubt about it,” he said. “But we haven’t gotten to the point of any in-depth engagement.”
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As for the newly acquired Empire locations, Martin said, Shell’s immediate focus will be to update the branding at the gas stations and ensure they meet Shell standards.
But he said the company will also assess all the new sites for possible upgrades and improvements.
Martin added that because Shell has a strong presence in Europe, where EV adoption has occurred faster than in North America, the company has a strong sense of what the fuel station of the future will look like.
“It is important to have a very compelling retail offer . . . so things like strong Wi-Fi offerings, good coffee, areas where customers can spend time in the store,” Martin said.
“We also only see pure EV hubs in the future. I think we will start to see this in Canada in the near future. We see that in Europe, and it will also be part of the mobility landscape for us.”
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