Sunoco LP (‘SUN’), together with its subsidiaries, primarily engages in energy infrastructure and distribution of motor fuels in over 40 U.S. states, Puerto Rico, Europe and Mexico.
The company is managed by its general partner, Sunoco GP LLC (the company’s ‘General Partner’), which is owned by Energy Transfer LP (‘Energy Transfer’). The company’s midstream operations include an extensive network of over 14,000 miles of pipeline and over 100 terminals. The company’s fuel distribution operations...
Sunoco LP (‘SUN’), together with its subsidiaries, primarily engages in energy infrastructure and distribution of motor fuels in over 40 U.S. states, Puerto Rico, Europe and Mexico.
The company is managed by its general partner, Sunoco GP LLC (the company’s ‘General Partner’), which is owned by Energy Transfer LP (‘Energy Transfer’). The company’s midstream operations include an extensive network of over 14,000 miles of pipeline and over 100 terminals. The company’s fuel distribution operations serve approximately 7,400 Sunoco and partner-branded locations, and additional independent dealers and commercial customers.
NuStar Acquisition
On May 3, 2024, the company completed the acquisition of 100% of the common units of NuStar Energy L.P. (‘NuStar’).
Zenith European Terminals Acquisition
On March 13, 2024, the company completed the acquisition of liquid fuels terminals in Amsterdam, Netherlands, and Bantry Bay, Ireland, from Zenith Energy.
Other Acquisition
On August 30, 2024, the company acquired a terminal in Portland, Maine, including working capital.
West Texas Sale
On April 16, 2024, the company completed the sale of 204 convenience stores located in West Texas, New Mexico, and Oklahoma to 7-Eleven, Inc. As part of the sale, the company also amended its existing take-or-pay fuel supply agreement with 7-Eleven, Inc. to incorporate additional fuel gross profit.
ET-S Permian
Effective July 1, 2024, the company and Energy Transfer formed ET-S Permian, a joint venture combining their respective crude oil and produced water gathering assets in the Permian Basin. The company contributed all of its Permian crude oil gathering assets and operations to ET-S Permian. Energy Transfer contributed its Permian crude oil and produced water gathering assets and operations to ET-S Permian. Energy Transfer’s long-haul crude pipeline network that provides transportation of crude oil out of the Permian Basin to Nederland, Houston, and Cushing is excluded from ET-S Permian.
Relationship with Energy Transfer LP
One of the company’s principal strengths is its relationship with Energy Transfer. As of February 7, 2025, Energy Transfer owned 100% of the membership interest in its General Partner.
Segments
The company’s business consists of three reportable segments: Fuel Distribution, Pipeline Systems, and Terminals.
Fuel Distribution Segment
The company is a distributor of motor fuels and other petroleum products, which it supplies to third-party dealers and distributors, to independent operators of commission agent locations, other commercial consumers of motor fuel, and to its retail locations.
The company is the exclusive wholesale supplier of the Sunoco and EcoMaxx-branded motor fuels, supplying an extensive distribution network of approximately 5,619 company and third-party operated locations throughout the United States and Puerto Rico. The company is also one of the largest distributors of Chevron, Texaco, ExxonMobil, and Valero branded motor fuel in the United States. In addition to distributing motor fuels, the company also distributes other petroleum products, such as propane and lubricating oil, and it receives lease income from real estate that it leases or subleases.
The company purchases motor fuel primarily from independent refiners and major oil companies, and distributes it across more than 40 U.S. states and territories, including Hawaii and Puerto Rico, to: 76 company-operated retail stores; 252 independently operated commission agent locations where it sells motor fuel to retail customers under commission agent arrangements with such operators; 6,965 retail stores operated by independent operators, which the company refers to as ‘dealers’ or ‘distributors,’ pursuant to long-term distribution agreements; and approximately 2,000 other commercial customers, including unbranded retail stores, other fuel distributors, school districts, municipalities, and other industrial customers.
The Fuel Distribution segment also includes one terminal, the company’s retail operations in Hawaii and New Jersey, credit card services, and franchise royalties.
Dealer Incentives
In addition to motor fuel distribution, the company offers dealers the opportunity to participate in merchandise purchasing and promotional programs arranged with vendors. The company’s dealer incentives give its dealers access to discounted rates on products and services that they would likely not be able to obtain on their own.
Sales to Contracted Third Parties
The company distributes fuel under long-term contracts to branded distributors, branded and unbranded convenience stores, and branded and unbranded retail fuel outlets operated by third parties. 7-Eleven, Inc. is the only third-party dealer or distributor which is individually over 10% of the company’s Fuel Distribution segment or individually over 10%, in terms of revenue, of its aggregate business.
Sunoco-branded supply contracts with distributors generally have both time and volume commitments that establish contract duration. These contracts have an initial term of approximately ten years, with an estimated volume-weighted term remaining of approximately five years.
Distribution contracts with retail stores generally commit the company to distribute branded (including, but not limited to, Sunoco-branded) or unbranded motor fuel to a location or group of locations, and arrange for all transportation and logistics. These contracts require, among other things, that dealers maintain the standards established by the applicable fuel brand, if any. The initial term of these contracts ranges from three to 20 years, with most contracts lasting for 10 years.
The company’s supply contracts and distribution contracts are typically constructed so that it receives either a fee per gallon equal to the posted rack rate, less any applicable commercial discounts, plus transportation costs, taxes, and a fixed, volume-based fee, which is usually expressed in cents per gallon, or a variable cent per gallon margin (‘dealer tank wagon pricing’).
During 2024, the company’s Fuel Distribution business distributed fuel to 252 commission agent locations. Under these arrangements, the company generally provides and controls motor fuel inventory and price at the site, and receives the actual retail selling price for each gallon sold, less a commission paid to the independent commission agents.
The company continually seeks to expand through the addition of new branded dealers, distributors, and commission agent locations, new unbranded commercial customers, and through acquisitions of contracts for existing independently operated sites from other distributors. The company evaluates potential independent site operators based on their creditworthiness and the quality of their sites and operations, including the site’s size and location, projected monthly volumes of motor fuel, monthly merchandise sales, overall financial performance, and previous operating experience. The company may extend credit to certain dealers based on its credit evaluation process.
Sales to Other Commercial Customers
The company distributes unbranded fuel to numerous other customers, including retail stores, unattended fueling facilities, and certain other commercial customers. These customers are primarily commercial, governmental, and other parties who buy motor fuel by the load or in bulk, and who do not generally enter into exclusive contractual relationships with the company, if they enter into a contractual relationship with the company at all. Sales to these customers are typically made at a quoted price based upon the company’s cost plus taxes, cost of transportation, and a margin determined at the time of sale, and may provide for immediate payment or the extension of credit for up to 45 days. The company also sells propane, lubricating oil, and other petroleum products, such as heating fuels, to its commercial customers on both a spot and contracted basis. In addition, the company receives income from the manufacture and distribution sale of race fuels at its Marcus Hook, Pennsylvania manufacturing facility.
Fuel Supplier Arrangements
The company distributes branded motor fuel under the Aloha, Chevron, Citgo, Conoco, EcoMaxx, Exxon, Mahalo, Mobil, Phillips 66, Shamrock, Shell, Sunoco, Texaco, and Valero brands. The company purchases branded motor fuel from major oil companies and refiners under supply agreements. The company’s largest branded fuel suppliers, in terms of volume, are Chevron, Exxon, Phillips 66, and Valero. The branded fuel supply agreements generally have an initial term of three to five years. Each supply agreement typically contains provisions relating to payment terms, use of the supplier’s brand names, credit card processing, compliance with other of the supplier’s requirements, insurance coverage, and compliance with legal and environmental requirements, among others.
The company also distributes unbranded motor fuel, which it purchases in bulk, on a rack basis based upon prices posted by the refiner at a fuel supply terminal, or on a contract basis with the price tied to one or more market indices.
Bulk Fuel Purchases
The company purchases motor fuel in bulk and holds it in inventory or transports it via pipeline. To mitigate inventory risk, the company uses commodity futures contracts or other derivative instruments, which are matched in quantity and timing to the anticipated usage of the inventory. The company also blends in various additives, including ethanol and biomass-based diesel.
Transportation Logistics
The company provides transportation logistics for most of its motor fuel deliveries through its own fleet of fuel transportation vehicles, as well as third-party and affiliated transportation providers. The company arranges for motor fuel to be delivered from the storage terminals to the appropriate sites in its distribution network at prices consistent with those historically charged to third parties for the delivery of fuel. The company also delivers motor fuel, propane, and lubricating oils to commercial customers involved in petroleum exploration and production.
Technology
Technology is an important part of the company’s Fuel Distribution segment. The company utilizes a proprietary web-based system that allows its wholesale customers to access their accounts at any time from a personal computer to obtain prices, place orders, and review invoices, credit card transactions, and electronic funds transfer notifications. Substantially all of the company’s customer payments are processed by electronic funds transfer. The company uses an Internet-based system to assist with fuel inventory management and procurement, and an integrated distribution fuel system for financial accounting, procurement, billing, and inventory management.
Sale of Regulated Products
In certain areas where the company’s convenience stores are located, state or local laws limit the hours of operation for the sale of alcoholic beverages, and restrict the sale of alcoholic beverages and tobacco products to persons younger than a certain age. State and local regulatory agencies have the authority to approve, revoke, suspend, or deny applications for and renewals of permits and licenses relating to the sale of alcoholic beverages, as well as to issue fines to convenience stores for the improper sale of alcoholic beverages and tobacco products. Failure to comply with these laws may result in the loss of necessary licenses and the imposition of fines and penalties on the company.
Pipeline Systems Segment
The company’s Pipeline Systems segment includes an integrated pipeline and terminal network consisting of approximately 6,000 miles of refined product pipeline (including the pipeline of the company’s J.C. Nolan joint venture), approximately 6,000 miles of crude oil pipeline (including the pipelines of ET-S Permian), approximately 2,000 miles of ammonia pipeline, and 67 terminals.
J.C. Nolan Joint Venture
Through the company’s investment in the J.C. Nolan Terminal, a joint venture with Energy Transfer, the company provides diesel fuel storage in Midland, Texas, with storage capacity of 130,000 barrels. Additionally, through the company’s investment in the J.C. Nolan Pipeline, the company transports diesel fuel from a tank farm in Hebert, Texas, to Midland, Texas, on a 500-mile pipeline with a throughput capacity of approximately 36 thousand barrels per day.
ET-S Permian
Effective July 1, 2024, the company and Energy Transfer formed ET-S Permian, combining their respective crude oil and produced water gathering assets in the Permian Basin. The company contributed all of its Permian crude oil gathering assets and operations to ET-S Permian. Energy Transfer contributed its Permian crude oil and produced water gathering assets and operations to ET-S Permian. Energy Transfer’s long-haul crude pipeline network that provides transportation of crude oil out of the Permian Basin to Nederland, Houston, and Cushing is excluded from ET-S Permian.
ET-S Permian operates more than 5,000 miles of crude oil and water gathering pipelines, with crude oil storage capacity in excess of 11 million barrels.
Terminals Segment
Through the company’s Terminals segment, the company operates four transmix processing facilities and 56 refined product terminals (two in Europe, six in Hawaii, and 48 in the continental United States). Transmix is the mixture of various refined products (primarily gasoline and diesel) created in the supply chain (primarily in pipelines and terminals) when various products interface with each other. Transmix processing plants separate this mixture and return it to salable products of gasoline and diesel. The company’s refined product terminals provide storage and distribution services used to supply its own retail stations, as well as third-party customers. In addition, the company provides services at its terminals to various third-party throughput customers.
Seasonality
The company’s business exhibits some seasonality due to its customers’ increased demand for motor fuel during the late spring and summer months, as compared to the fall and winter months. Travel, recreation, and construction activities typically increase in these months in the geographic areas in which the company operates, increasing the demand for motor fuel. Therefore, the volume of motor fuel that the company distributes is typically somewhat higher in the second and third quarters of its fiscal year (Year Ended December 31, 2024).
Environmental Matters
Some of the company’s pipelines are subject to regulation by the Pipeline and Hazardous Materials Safety Administration (‘PHMSA’), pursuant to the Hazardous Liquids Pipeline Safety Act of 1979 (‘HLPSA’).
The company adjusts its rates annually in accordance with the Federal Energy Regulatory Commission (‘FERC’) indexing methodology, which currently allows a pipeline to change its rates within prescribed ceiling levels that are tied to an inflation index.
The company’s ammonia pipeline is subject to regulation by the Surface Transportation Board (the ‘STB’) pursuant to the ICA applicable to such pipelines (which differs from the ICA applicable to interstate liquids pipelines).
The company is subject to the requirements of the Occupational Safety and Health Act (‘OSHA’) and comparable state statutes that regulate the protection of the health and safety of workers.
History
The company was founded in 1886. It was incorporated in 2012. The company was formerly known as Susser Petroleum Partners LP and changed its name to Sunoco LP in 2014.