Pilot Flying J expands reach into oil and gas service

  (Photo: Shutterstock)

(Photo: Shutterstock)

Pilot Flying J, the largest North American operator of travel centers and the fourth-largest tanker fleet in the US, yesterday announced two strategic partnerships to grow its service offerings in the exploration and production (E&P) sector. Through a joint venture and an acquisition, PFJ is extending its core logistics business with additional water, sand, and crude hauling capabilities.

You may know PFJ as a travel center retailer. Headquartered in Knoxville, the company has more than 750 retail locations in 44 states. They offer roadside assistance at over 145 locations nationwide, and provide drivers with access to more than 72,000 parking spaces for trucks at more than 400 locations. The partnerships are all a part of a diversification strategy in areas that naturally overlap.

"With Pilot Flying J's fleet size, safety record, balance sheet, and geographic reach across all major oil and gas basins, we're uniquely positioned to serve this industry," PFJ President Ken Parent said. "These partnerships are a key driver of our growth strategy and demonstrate the company's ongoing commitment to diversifying our business."

Brad Jenkins, PFJ’s VP of transportation and supply, estimates their size as about 1100 trucks in the tanker class. 

"Safety is a huge part of the equation," Jenkins tells FreightWaves. "For the third consecutive year, we recently were recognized by the National Tank Truck Carrier (NTTC) as a Grand Award Winner in the over 90 million miles class. As safety is our #1 quality standard, we’re excited to be recognized by the NTTC in this way and hope this dedication to safety attracts drivers to our fleet. Transportation and logistics in the liquid and energy space are core competencies of PFJ that we’re looking to leverage and serve in the E&P sector."

What is the PFJ diversification strategy that CEO Ken Parent refers to in the company's announcement? "We're trying to leverage the core competencies from our retail strategies to the energy and other commodities that aren’t very far removed from hauling diesel. Hauling crude isn’t that different. There’s a few things that are different, but for the most part it overlaps. We think the PWT and the crude business are both going to be growth vehicles for us, and we hope to achieve a reasonable amount of scale in these new ventures,” Jenkins says.

Why is PFJ expanding its fleet in the direction of oil and gas logistics? "Of the 1100 trucks we were already running about 250 in the crude space. It’s built up over the years. We’re strategically situated with people and assets in the crude area. Our customers have asked us about transportation and logistics services where they are and are asking us where to go."

In June, PFJ, Produced Water Transfer LLC, and Complete Vacuum and Rental LLC, formed PDPS LLC, a new company operating under the name PWT LLC. PWT will leverage its fleet of tanker trucks and network of salt water gathering pipelines and disposal facilities to provide saltwater transportation and disposal services to the oil and gas sector. The new company will focus on providing services to producers across Louisiana, Oklahoma, and Texas. PFJ will own a majority of the business, which will be managed by Produced Water Transfer's President and CEO Steve Kent and his management team.  

One month later, in July, PFJ through its PWT Joint Venture, purchased Bridger Environmental LLC, a saltwater transportation and disposal company, from propane supplier Ferrellgas Partners, L.P. In addition, PFJ also acquired Ferrellgas Partners, L.P.'s crude transportation business operating under their Bridger Transportation subsidiary to continue expanding its current presence in the space.

Through the deal, PFJ and PWT will expand their tanker fleet and acquire 10 saltwater disposal wells and two crude oil pipeline injection terminals in Wyoming.

This acquisition will make PFJ one of the largest third-party crude hauling fleets in the country, with more than 500 trucks on the road serving the oil and gas industry.

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