Since Valero Energy acquired the UK marketing and distribution assets of Chevron more than two years ago, it has been on a mission to strengthen its supply infrastructure in order to grow the business. This month sees the completion of a significant part of that project with the coming on full stream of the company’s Manchester fuel terminal following an intense year of refurbishment. The terminal, which had been in existence since the ’70s, had been mothballed in 2010, when it was owned in an equal three-way split by Chevron, Total and Esso, but operated by Esso on behalf of the other stakeholders.
In March 2012 Valero acquired full ownership of the 26-acre site and spent several million pounds refurbishing and upgrading it. All the storage tanks have been cleaned, coated internally and NDT (non-destructive) inspected. Valero had also acquired full ownership of the mainline pipeline (MLP), which runs from the company’s refinery in Pembroke across to the Kingsbury terminal in the Midlands (north east of Birmingham), with a 72-mile ’leg’ coming off the line at Seisdon (near Wolverhampton) and going up to the Valero Manchester Terminal (VMT), which has been open since March. The MLP allows Valero to move product directly from the Pembroke refinery to both the Kingsbury and Manchester terminals. All products going into VMT arrive from the Pembroke refinery via the MLP (a 227 mile journey) and are stored on site in nine tanks. The range of products includes gasoline and diesel, but also jet fuel delivered to Manchester airport and gas/heating oil for local industry, hospitals and schools.
The re-opening of the site is great news, not just for Valero’s Texaco-branded fuel retailers in the North/North West/Midlands region, but other independent dealers in the area who will now be targeted as potential customers. It provides security of supply for the region and reduces trucking time from other terminals further afield. "This is huge for Valero," explains Adele Shackleton, Valero’s regional retail manager in the North. "We are masters of our own destiny now we don’t need to go to a third party for fuel. It’s our fuel, our refinery, coming up through our pipeline, going through our terminal.
"For a dealer we can offer speed, fuel quality and security of supply. My view is that if the fuel is not underground you can’t sell it. And as much as a dealer will think a promotion or similar is nice, ultimately they want the fuel underground they don’t want to be out of stock. Coupled with that is our delivery service. Our claim is that 98% of orders received by 11am one day will be fulfilled within a retailer’s delivery window the next day. I don’t know of any other oil company that can match that. We hear of terrible out-of-stocks with other oil companies. But we have relatively few.
"Being able to offer this kind of service means we’ve been able to significantly grow the retail business, which is a real focus for Valero in the UK. We’ve had some major wins in terms of new business, putting about 45 new sites on in the northern region since January. That equates to about 120mlpa of incremental business this year."
Valero supplies around 200 service stations in the Manchester/North West area and these customers can now get their product directly from the VMT, eliminating the long runs some road tankers had to do previously from Kingsbury in the Midlands. The terminal can also provide fuel for sites in North Wales, South Yorkshire and the Midlands.
Nine staff are employed at the terminal, which has total storage capacity of 90,000 tonnes. Approximately 21 road tanker drivers will operate out of it, handling about two million litres a day, with the potential for six-to-eight million.
Manager of the Manchester terminal Dave Crook, who has worked at the site for the past year overseeing the redevelopment with a hand-picked team, said the VMT is raising standards in the industry and response from customers has been amazing: "Drivers enjoy coming here to load it’s a breath of fresh air for them. If there’s an issue on the bay it’s dealt with immediately. They are encouraged to take part in the day-to-day running of the terminal, such as at safety committee meetings, then they buy into it. Everything is spotless and it’s going to get better and better.
"I’ve been in this industry for 38 years and I still get a buzz out of this sort of development. Oil companies don’t open fuel terminals these days they close them or sell them. So for Valero to own a site of this size and turn it around into a state-of-the-art fuel terminal, is unheard of. It shows commitment."
Manor moves five
Major dealer signings have included Cheshire-based Manor Service Stations. The Top 50 Indie, which has 12 sites, moved five sites over to the Texaco brand earlier this year. It had been BP for about 15 years, according to managing director Peter Brough (pictured left). "In the current climate I needed more flexibility on pricing in order to compete at certain times and in certain locations. Texaco gave me the opportunity to be more flexible, plus access to Texaco personnel is excellent. We’re very pleased to have the terminal in the North which is pipeline fed. It was one of the selling points of the deal."