Global Partners' System of Assets Prepares It for Tariffs
WALTHAM, Mass. — 2024 was a defining year for Global Partners LP, one that strengthened the partnership's position in the U.S. liquid energy market and expanded its ability to serve a growing wholesale, retail and commercial customer base.
Through strategic developments, the company is well-positioned to prepare for the implementation of tariffs on oil and gas imports, and seize growth opportunities that create long-term value for unitholders, President and CEO Eric Slifka said during its fourth-quarter and full-year 2024 earnings call on Feb. 28.
Since late 2023, Global Partners has more than doubled its terminal count and capacity, integrating 30 additional terminals and increasing its total storage capacity by 12.1 million barrels to 22 million barrels. Specifically:
- The acquisition of 25 terminals in December 2023 extended the partnership's network into Maryland, the Carolinas, Georgia, Florida and Texas, expanding its operations to 18 states. The deal also included a significant 25-year take-or-pay contract with Motiva Enterprises, a subsidiary of Saudi Aramco.
- In April 2024, Global Partners further strengthened its Northeast presence with the acquisition and integration of four additional terminals.
- In November, the company expanded again, acquiring a 959,730-barrel liquid energy terminal in East Providence, R.I., enhancing its capacity to handle larger cargo-sized vessels.
"These strategic investments, totaling more than $528 million, solidified our role as an essential part of the U.S. energy infrastructure. It also enhanced our ability to serve our rapidly growing customer base," Slifka said.
Speaking to the uncertainty surrounding the potential of tariffs imposed by the Trump Administration, company executives pointed out that Global Partners' system of assets is designed to allow the partnership to source barrels from anywhere. The tariffs went into effect on March 4, four days after the earnings call.
"That's one of the great things about our system and our assets is that we're not tied into one source of supply. So, we can literally go anywhere for a barrel, and I think that's important," Chief Operating Officer Mark Romaine said during the question-and-answer session of the call. "We'll do our best to supply our system for our customers, but I think we have flexibility to go anywhere to get a barrel and whether that's shipping up Colonial, whether that's taking in imports from other regions, we can take a barrel from anywhere. So, I'm not that worried about the supply dynamic.
"That's a key point, not just ... for this potential event, but I think it's a key point in general that when you look at our system, because it allows us to source anywhere and source lowest-cost barrel, [we can] optimize around that effort. And I think we're very comfortable in that setting," he continued.
Global Partners 2024 Earnings
With that backdrop, the partnership will continue to monitor global economic conditions and the evolving supply landscape, with additional scenario planning to assess any tariffs. Additionally, tariffs will not impact Global Partners' decision to pursue future acquisitions.
"Given our system, we have the ultimate flexibility as to how we source and where we source that barrel. And so, although it might not be the best economic outcome, at the end of the day over time, those supply chains will adjust," Slifka added. "Our perspective is it's business as usual. It's going to change how supply moves around the globe but for us, we're going to be as efficient as we can be in supplying and sourcing lowest-cost barrels to make sure that we're delivering on our promise to our guests and customers.
"So, one long answer to the question, but it doesn't affect how we think about our business and how we want to invest and where we believe we have competitive advantages," he continued. "Actually, we think this highlights our competitive advantages in the markets that we're in. So, it's positive for our business model, and I actually think it's one of the things that differentiates us vs. our competitors."
By the Numbers
Bolstered by an integrated asset base and diverse portfolio of liquid energy products, Global Partners capped 2024 with a solid fourth-quarter performance, Slifka reported. According to the executive, both its wholesale and gasoline distribution and station operations (GDSO) segments demonstrated robust growth in 2024.
GDSO segment product margin was $213.6 million in the fourth quarter of 2024 compared to $245.4 million in the same period of 2023. Product margin from gasoline distribution was $145.7 million compared to $177.8 million in the year-ago period, primarily reflecting lower fuel margins (cents per gallon).
Station operations product margin — which includes convenience store and prepared food sales, sundries and rental income — increased to $67.9 million in Q4 2024 from $67.6 million in Q4 2023.
Looking at its wholesale segment, product margin was $79.8 million in the fourth quarter of 2024, compared to $51.9 million in the same period of 2023.
Other Financials
Other earnings Global Partners reported for the fourth quarter and full year were:
- Adjusted EBITDA of $97.8 million for Q4 and $388.9 million for FY 2024.
- Net income of $23.9 million for Q4 and $110.3 million for the full year.
- Gross profit of $268.8 million for Q4 and $1.1 billion for the full year.
- Total sales of $4.2 billion in Q4, primarily due to a decrease in prices and partially offset by an increase in volume sold.
- Total volume of 1.8 billion gallons in Q4 2024 vs. 1.6 billion gallons in Q4 2023.
Global Partners' portfolio of c-stores totaled 1,584 sites, in addition to the 64 sites operating under the Spring Partners Retail LLC joint venture, for the quarter ended Dec. 31, 2024.
Headquartered in Waltham, Global Partners operates or maintains dedicated storage at 54 liquid energy terminals — with connectivity to strategic rail, pipeline and marine assets — spanning from Maine to Florida and into the U.S. Gulf States. Through this extensive network, the company distributes gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers. In addition, Global Partners owns, operates and/or supplies more than 1,700 retail locations across the Northeast states, the Mid-Atlantic and Texas.
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