Oil storage company Gibson Energy Inc. has sold its Canadian truck transportation business for $100 million, which a company official says will likely not affect employment in Moose Jaw.
Gibson sold its trucking business to Trimac Transportation on April 2. The sale includes Gibson’s entire fleet of trucks for $70 million and its field office and shops near Edmonton for $30 million.
There is also the potential that additional proceeds could be generated from the sale, depending upon the performance of the business during the next four years, according to a news release. The agreement is expected to close in mid-2019.
Following the sale's closure, Gibson’s continuing businesses will retain access to safe and reliable truck transportation services at competitive rates through a long-term agreement with Trimac, the news release added.
The oil storage firm owns a petroleum processing plant in Moose Jaw, located on Manitoba Street East. According to Gibson’s website, the processing plant is the largest supplier of roofing flux asphalt in Western Canada; is the largest manufacturer in Western Canada of polymer modified asphalt; and is a major supplier to North American markets of high-quality road grade asphalt.
Gibson Energy is committed to its processing plant in Moose Jaw, Mark Chyc-Cies, vice-president of strategy, planning and investor relations, told the Moose Jaw Express.
“The sale of Canadian trucking and our attention of Moose Jaw are separate matters. I wouldn’t see the sale of trucking impacting employment at the Moose Jaw facility,” he said.
The status of Gibson’s Moose Jaw location came up during the company’s recent investor day.
“We get a lot of questions about Moose Jaw,” said Steve Spaulding, president and chief executive officer. However, he downplayed calling the plant a refinery, listing several important common refinery components that are not present at Moose Jaw.
“It’s literally just two separation towers, two heaters, supply tanks and refined products tanks,” he said.
The company believes there are opportunities at the Moose Jaw plant to realize further operating and maintenance capital cost efficiencies, investors heard during the conference call.
The company is also evaluating possible high-return capital projects, including increasing throughput at the plant at an attractive relative cost, Spaulding said. Consistent with its infrastructure focus, Gibson Energy has started a process to reduce inconsistency in cash flow by securing take-or-pay tolling structures on a portion of output capacity. It would then re-evaluate the role of the Moose Jaw plant later.
More information about Gibson Energy can be found at www.gibsonenergy.com.
