Fuel retailer Pilot Flying J in talks to acquire Noble Petro: sources

HOUSTON (Reuters) - Fuel retailer Pilot Flying J is in talks to acquire Noble Petro, the U.S. refined products supply and wholesale distribution business of trader Noble Group, two sources familiar with the matter said this week.

Noble, once Asia’s largest commodities trading shop, is divesting operations after two years of financial upheaval that knocked down its shares and pushed its credit rating to below investment grade.

Last week, Singapore-listed Noble said it had started a process to sell its oil liquids unit and announced plans for up to $1 billion of disposals over the next two years. It also disclosed a sale of its U.S. gas and power business to Swiss commodities trader Mercuria Energy Group for $248 million.

The price Noble Petro might fetch was not immediately clear. One source said other companies have eyed the business, which distributes refined products across the U.S. Gulf Coast and Mid-Continent from storage facilities with access to major pipelines, including the Colonial Pipeline.

Representatives from Noble declined to comment. A spokeswoman for Pilot Flying J said the company did not “have any acquisition news to share at this time.”

Noble Petro acquired assets of Northville Product Services in 2010, adding 3.7 million barrels of storage in Pasadena, Texas, and the Midwest, as well as supply contracts with key U.S. Gulf Coast refiners and a wholesale marketing system in the Magellan, Plantation and Teppco pipeline systems.

Noble, burdened by $3.3 billion in debt, estimated a second-quarter net loss of about $1.7 billion, citing liquidity worries that curbed its ability to seize trading opportunities.

Steven Hollerbach, formerly a managing director at Noble, recently moved to Pilot Flying J to run the company’s light products business, three sources familiar with the matter said this week.

Hollerbach did not respond to a request for comment on LinkedIn.

Knoxville, Tennessee-based Pilot Flying J has more than 750 retail locations across 43 states, according to the company. The privately held company hired Carson Williams in December 2016 to handle crude supply and trading, according to his LinkedIn profile.

Large fuel retailers like Pilot Flying J have gotten a boost from selling U.S. biofuels credits earned by blending fuels including gasoline and diesel with renewables such as ethanol.

Reporting by Liz Hampton; Editing by Steve Orlofsky