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Motiva Sells Another 52 Sites

Issue Date: CSP Daily News, October 30, 2009

New Petroleum Marketing Group affiliate snaps up Shell sites in Virginia

FAIRFAX, Va. — As part of the ongoing transition of Shell and Motiva gas stations from direct- to wholesaler-supplied operations, Shell subsidiary Motiva Enterprises LLC sold 52 Shell-branded sites to PMG Northern Virginia LLC, a newly formed entity created by Fairfax, Va.-based Petroleum Marketing Group Inc.

Petroleum Marketing Group Inc. is a large and well-established Shell-, ChevronTexaco- and CITGO-branded jobbership and a regional distributor of petroleum products and services in the Mid-Atlantic region of the United States. The company, owns, operates and/or supplies more than 250 gas stations in the region.

As reported in a CSP Daily News Flash yesterday, Petroleum Capital and Real Estate LLC, West Friendship, Md., acted as the exclusive financial advisor to PMG Northern Virginia in the deal.

“We are excited that we could help facilitate this transaction in a very challenging lending environment,” said John Sartory, managing director and principal of Petroleum Capital and Real Estate LLC. “This was a rare opportunity for our client to acquire a large number of premium real-estate sites in northern Virginia, a trade area that is still growing and has very high barriers to entry. In addition, our firm secured all of the senior secured credit facilities required to close on the transaction from a single regional lender and as a result, PMG Northern Virginia LLC was able to avoid the costly and time consuming loan syndication process.”

All the sites are located in northern Virginia. The sale closed on Tuesday, Oct. 27.

Shell plans selling off its retail holdings by 2010. The company is continuing its plan to dissolve its multisite-operator (MSO) partnerships and to grow through the wholesale class of trade, including wholesaler joint ventures, transitioning more markets from direct-supplied to wholesale- or wholesale/joint-venture-supplied markets.

The strategy allows Shell and Motiva the opportunity to participate in the market and site income streams with a more efficient operating structure, the company has said. These relationships allow Shell and Motiva to mitigate risk while continuing to influence long-term branding decisions, capital structure, growth, dividend streams and real-estate presence. Additionally, the entrepreneurial culture of a joint venture fosters growth, facilitates swift decision-making and enables quick execution of projects.

Shell Oil Products US, a subsidiary of Shell Oil Co., Houston, has a network of approximately 6,100 branded stations in the western United States. Houston-based Motiva, which operates the eastern and southeastern U.S. refining and marketing businesses for Shell and Saudi Refining Inc. (SRI), possesses a marketing network that supports approximately 7,700 Shell-branded stations.

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