Sunoco Wins Fuel Supply Contract - Analyst Blog

With the target of strengthening its position on toll roads, Sunoco Inc. (SUN), a leading transportation fuel retailer, will start operating nine fuel stations along the 172-mile Garden State Parkway, New Jersey.  

In this regard, Sunoco signed a deal with New Jersey Turnpike Authority, which manages the parkway and Getty Petroleum Marketing Inc., the current service station operator. The agreement covers a term of six years, stretching from January 2011 to December 2016. Sunoco also extended its contract on two fuel stations along the Palisades Parkway, New Jersey, through December 2015.

As a part of this endeavor, Sunoco inked a deal with Pennsylvania-based distributor of petroleum products Lehigh Gas Corporation to buy 25 retail locations in the Buffalo, Syracuse, Albany, and Rochester markets of central and northern New York, late last December.

In addition, Sunoco also won a contract to sell fuel to outlets at the 16 service plazas along the Ohio Turnpike. The agreement signed with The Ohio Turnpike Commission will be implemented in 2012 and remain valid till 2016.  

Headquartered in Philadelphia, Sunoco currently sells fuel to stations along seven major toll roads, the Atlantic City Expressway, Delaware Turnpike, Maryland Turnpike, New Jersey Turnpike, New York Thruway, Palisades Parkway, and Pennsylvania Turnpike.

Sunoco management commented that these contracts will help in expanding its various business aspects all over the U.S. These deals not only highlight the company's brand recognition and customer loyalty, but also establish its commanding position in retail fuel business along the major roadways.  

Sunoco, which enjoys a 31% interest in Sunoco Logistics Partners, L.P. (SXL), currently retains a Zacks #3 Rank (short-term Hold recommendation). We are also maintaining our long-term Neutral rating on the stock.

 
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