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GLP PR A - Global Partners LP News Story

$24.66 0.1  0.4%

Sector
Energy
Size
Small Cap
Market Cap £339.7m
Enterprise Value £1.31bn
Revenue £8.36bn
Position in Universe th / 6400

CORRECTED-Global Partners cuts workers, scraps crude at rail terminal

Fri 29th January, 2016 2:41pm
(Corrects second paragraph to say evaluating gasoline stations 
and convenience stores instead of all businesses) 
    By Kristen Hays 
    HOUSTON, Jan 28 (Reuters) - Global Partners LP  GLP.N  has 
laid off 8 percent of its work force and aims to handle only 
ethanol, not crude, at its rail terminal in Oregon in response 
to the nearly 70 percent plunge in oil prices since mid-2014, 
the company said on Thursday. 
    The company also cut its distribution for the 
October-December period by 33.7 percent compared to the previous 
quarter, and is evaluating its portfolio of gasoline stations 
and convenience stores for possible disposition or 
reconfiguration. 
    Global Partners' stock price fell more than 21 percent to 
close at $15.38 Thursday on the New York Mercantile Exchange. 
    "We continue to be negatively impacted by fixed costs 
associated with our crude oil business, including railcar 
leases," Chief Executive Officer Eric Slifka said in a 
statement. 
    "As a result, in the first quarter we have implemented a 
number of initiatives to reduce expenses and manage our cash 
flow," he said. 
    Global Partners has been expanding its railport and terminal 
at the Port of St. Helens in Clatskanie, Oregon, to increase 
storage, handle Panamax-sized vessels and increase crude 
offloading capability to up to 120,000 barrels per day. That 
project is slated to be finished in the third quarter this year. 
    The company held a meeting for analysts at the terminal in 
November 2014, touting that $100 million project. 
    However, the plunge in oil prices has narrowed discounts of 
North American crudes to global crudes, eroding rail transport 
profitability.   
    Slifka said the company was "taking steps" to use the Oregon 
terminal for ethanol transloading "during this period of 
headwinds in the crude market." The terminal houses an ethanol 
plant. 
    The company cut 70 jobs, about 8 percent of its work force 
excluding convenience store workers. Jobs were slashed at the 
Oregon terminal as well as the company's crude loading terminals 
in North Dakota and its corporate offices.  
    The company did not explain the issues with railcar leases, 
but current monthly leases for the newest, safest tank railcars 
that carry crude have fallen about $700 from $1,300 early last 
year and up to $2,450 in 2014.  urn:newsml:reuters.com:*:nL2N1561F7 
    Companies that signed multi-year leases when they were at 
their highs have to pay those costs whether or not they move 
crude unless they negotiate new rates with lessors. 
 
 (Reporting By Kristen Hays; Editing by Tom Brown) 
 ((kristen.hays@thomsonreuters.com; +1 713-210-8538; Reuters 
Messaging: Reuters Messaging: 
kristen.hays.reuters.com@reuters.net)) 
 
Keywords: GLOBALPARTNERS LAYOFFS
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