Meanwhile, suppliers are already looking at a package of terminals that represent a mixed bag of attractive and not-so-attractive logistical assets, and a similar "book" listing commercial and industrial business accounts in gas and electricity is expected to be circulated shortly.
The Hess buyout of the interest in WilcoHess means that all of the Hess retail network can be offered "free and uncluttered" when that package is put out for sale. Goldman Sachs is handling the divestitures of all downstream assets, and there are still discussions about whether bids will be restricted to the entire 1,350 retail sites or to various regional segments.
A typical Hess station moves about 195,000 gallons per month, with inside sales in the neighborhood of $70,000, sources say.
Hess' exit from the downstream business was prompted in part by a proxy battle with hedge fund Elliott Management. Principals at the two companies ironed out their differences last month, with some Elliott-nominated candidates placed on an expanded Hess board of directors.
That group will probably push for quicker divestiture from non-core businesses, including retail, wholesale and natural gas and electricity marketing.
A package listing all Hess terminals has already been circulated among possible buyers. The company moves approximately 700,000 b/d of crude, refined products and feedstock by land, sea and pipeline and is the largest supplier of marine bunker fuels on the East Coast with approximately 300 customers.
The 20 or so terminals that are part of the package represent about 22 million bbl of storage capacity, and there is additional storage of millions of barrels in the Caribbean.
Some of the most attractive products terminals in the Hess package are deepwater facilities on the East Coast including locations in New York Harbor, Baltimore, Md., Florida and the Carolinas. There are also nice niche terminals in upstate New York.
But some of the bundled properties in New York and New Jersey represent sites where the traditional residual fuel and heating oil sales are fractions of what existed a decade ago.
A less high-profile segment across multiple forms of energy may get quite a bit of interest. Hess built a substantial "suite" of total energy solutions for commercial, industrial, institutional and small business customers for electricity, natural gas and fuel oil.
The company boasts about 21,000 commercial and industrial customers in that segment, and offered various cost-cutting plans for natural gas and electricity in the New York metro area for small businesses.
While this segment was often not tied to Hess' oil production or refining, it has a solid reputation among utilities and other across-the-Btu energy marketing companies.
