Article

ThompsonGas

ThompsonGas is ringing in the new year with its own rail terminal, which it hopes will provide a solution to ongoing winter supply challenges.

The mid-Atlantic and southeastern U.S. retailer was targeting mid-January to bring in its first railcars to an established CSX facility in Baltimore that “was once a vibrant and critical component of the mid-Atlantic propane supply chain,” says Randy Thompson, CEO of ThompsonGas.

The company has used rail as part of its supply, but the terminals were controlled by other agencies, says Mark Zimora, executive vice president and COO of ThompsonGas. So this is the first terminal in which ThompsonGas serves as the controlling entity.

Zimora says there were two basic motivations for pursuing the rail terminal project.

“We wanted to reduce our dependence on the pipeline, and this was a good way to diversify supply points,” he says. “The second is from an industry stewardship standpoint. Someone had to step up and provide some storage and supply for the growing mid-Atlantic marketplace and also replace the supply lost in Del City, which will have a ripple effect into our market.”

Due to slumping demand for crude products, Valero announced in November the closing of its Delaware City, Del., refinery. Also in 2009, Sunoco closed its Eagle Point refinery in New Jersey indefinitely.

“We just couldn’t see the logic in letting such an important industry asset just sit there and collect dust, especially with all of the uncertainty and stark allocation ratios at Eagle and the loss of supply from Sunoco and Valero,” Thompson says of the rail terminal. According to ThompsonGas, the facility was once part of United Propane, and Inergy used it as a point to wholesale product.

The facility, with 300,000 gallons of on-site storage capacity, can unload four railcars and has the spur capacity to stage up to 20 cars. It is also capable of putting about 600,000 gallons of propane per day into the market. More than 20 million gallons moved through the terminal in the past, and ThompsonGas hopes to achieve those same levels, Zimora says.

In addition to ThompsonGas using the facility to serve its customers, it is inviting other propane retailers to the terminal as well.

“It’s understandable that this terminal may not fit into folks’ supply picture this year, but we’d love to visit with interested parties in the spring, maybe even at the Southeast [show in Atlanta], to get this facility factored in to their 2010-11 supply plans,” Zimora says.

TEAM: J. Randall Thompson, president and CEO; G. Jeffery Kerns, executive VP and CFO; Mark Zimora, executive VP and COO
LOCATION: Headquarters in Hagerstown, Md.
FOUNDED: 1946
EMPLOYEES: 165
CUSTOMERS: 50,000 across eight eastern states
PROPANE SOLD: About 15 million gallons per year
STORAGE: 2 million gallons
ONLINE: www.thompsongas.com