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‘Immense amount of pain’ predicted for Canadian oilfield services sector

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Canada’s oilfield services sector is in for “an immense amount of pain” over at least the next year thanks to low North American oil and gas exploration activity amid a worldwide glut of cheap crude, according to a report from CIBC.

Drilling and well completion companies stand to suffer the most as producers will be reluctant to reverse cuts in spending and production linked to the COVID-19 pandemic and its affect on fuel demand, the analysts warn.

“There is no way to sugarcoat it. The oilfield services sector is in for an immense amount of pain over the balance of 2020 and into 2021,” the report says.

“This will be felt across the sector and while some sub-segments will be more impacted than others (i.e. drilling/completion services lines), no one will be immune, especially with the broad-based shut-ins of existing production.”

On Thursday, Calgary-based STEP Energy Services Ltd. was the latest oilfield service provider to report a series of measures to deal with sharply lower demand that began in mid-March.

The measures include job cuts, wage rollbacks, parked equipment and reduced capital spending in its hydraulic fracturing and coiled tubing well service operations in Canada and the U.S.

It is also seeking relief from its lenders because it could potentially breach its debt-to-adjusted-earnings covenants within the next two quarters, triggering a possible demand for immediate repayment of all amounts due.

“Volatile market conditions have created uncertainty for our clients and they have responded by announcing material reductions in capital expenditures and cancelled work programs,” said STEP in a statement.

“Natural gas prices have strengthened of late which could support additional work later in the year; however, this is not expected to offset the decline in demand for services from oil-directed work.”

In a note, analyst Ian Gillies of Stifle FirstEnergy said STEP’s results were in line with expectations, but the bank covenant warning is worrying for investors.

“The outlook for North American hydraulic fracturing remains extremely challenging due to the material uncertainty surrounding the global economy and crude prices,” he said.

The authors of the CIBC report said the services sector downturn is made worse by expectations of “a prolonged trough” in activity as demand for new oil and gas production is delayed by the need to draw down crude storage and as idled wells are reactivated.

It said shares in the services companies it covers are down between 15 and 70% since early March, some of which is justified by the cost of challenges to come, but some due to “indiscriminate selling” by spooked investors.

Ongoing equipment retirements are expected to allow the North American services sector to eventually match capacity with demand, it said.

At STEP, adjusted earnings before interest, taxes, depreciation and amortization fell by 12% to $22.8 million in the three months ended March 31, despite a 10% increase in consolidated revenue to $194 million.

It attributed the decrease to a $2.5 million provision for bad debt and $1.9 million in severance for unspecified workforce reductions in Canada and the United States.

Despite a recent rise in U.S. benchmark oil prices to above US$30 per barrel, STEP says it has further reduced its 2020 capital program to $15.5 million, down from $24 million previously and its initial plan of $47 million.

It reported a first-quarter net loss of $52.2 million, compared with a net loss of $600,000 for the same period in 2019, mainly due to $58.8 million in non-cash impairment charges against its Canadian well-fracturing assets.

Earlier this month, the PetroLMI Division of Energy Safety Canada reported more than 7,700 oil and gas sector jobs were lost in April compared with March, with 6,500 of the lost jobs from the oilfield services sector.

 


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Canal route brings Alberta crude to Eastern Canada

UnknownCanada is the world’s fourth-largest exporter of oil and the third-largest repository of proven reserves of which 96% come from Alberta’s oil sands. This month Alberta got a new export customer for its heavy crude: Plans are to ship product to this customer via the Panama Canal in medium-sized Aframax ocean tankers. Surprising to learn that the customer is Halifax-based Irving Oil, a Canadian major that had hoped to get Alberta crude via an east-west pipeline that has been in discussion since 2013. The ‘Energy East’ pipe faced an uphill battle with Quebec and First Nations groups voicing concerns. The project was scrapped in 2017 leaving Irving without easy access to the massive Alberta oil store.

Last week the company announced the Federal Government had agreed to its April 13 request for an urgent need for more crude oil for its refineries. The government granted Irving a one year permit to bring Alberta heavy oil sands crude from Pacific tidewater to its facility in New Brunswick.

Reports quote Irving Oil chief refining and supply officer Kevin Scott saying, “It is critical to our customers, to our business, and to energy security throughout Atlantic Canada that we are able to use foreign crude oil tankers to access Western Canadian crude oil on an urgent basis and going forward for one year to allow for effective and flexible supply chain planning and to strengthen the link between Canadian oil producers and our refinery in this challenging and uncertain time.”

Irving will ship its Western Canadian oil 11,771 kilometres from British Columbia through the Panama Canal to its Canaport facility in Saint John, NB. Irving will also source Canadian oil delivered through ports in Texas and Louisiana. Altogether the route is more than twice the length of the once proposed Energy East pipeline that would have run 4,600 kilometres.

Irving Oil operates Canada’s largest refinery in Saint John and has a network of more than 900 fuelling locations and 20 Big Stop convenience centres. The company provides heating oil, diesel, gasoline as well as lubricants and a range of other products to markets in Canada, the U.S. and Ireland.


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Imperial Oil reports $188M loss as COVID-19 hits workers, slows work schedule

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CEO Brad Corson

Imperial Oil Ltd. is slowing or deferring maintenance work throughout its operations as it tries to ensure employee safety in the wake of a COVID-19 outbreak that has infected 83 workers at its Kearl oilsands mine in northern Alberta.

The Calgary-based company said Friday it will start a planned one-month maintenance shutdown of one of its two production trains at Kearl in a few days and extend it by an extra month to late June or early July to allow more distancing between workers.

The extension means production at Kearl will fall from the record average of 226,000 barrels per day in the first quarter – and 238,000 bpd in March – to about 150,000 bpd in the second quarter, CEO Brad Corson told a conference call on Friday.

“This allows us to progress at a more measured pace and greatly reduce the number of people we have working at site at any given time and without affecting the overall scope,” he said.

“It also allows us to complete the work at a time of likely low prices so we can have the asset fully up and running as and when prices recover.”

He said the company has also reduced the scope of maintenance at its Sarnia, Ont., refinery, will defer planned work at its Sarnia chemical plant and is postponing planned maintenance at its Nanicoke, Ont., and Strathcona (Edmonton) refineries until after this year.

Twenty-two of the Kearl workers stricken with the coronavirus have recovered and the others are being monitored or treated as necessary, Corson said.

Work at the project is continuing with enhanced physical distancing, cleaning and health screening, along with supplying face masks and moving fewer workers on transport airplanes and buses.

Kearl is owned by Imperial at 71% and its parent company, ExxonMobil, with 29%.

The record output at Kearl thanks to the introduction of supplemental ore crushers drove overall Imperial production to about 419,000 barrels of oil equivalent per day in the first three months of 2020, up from 388,000 boe/d in the same period last year.

Record throughput at its Strathcona refinery helped take its overall processing total to 383,000 barrels per day, the same as a year ago.

Corson said demand for jet fuel and gasoline fell significantly in March, while diesel demand dropped by a more moderate amount, due to measures taken to limit the pandemic. However, there are signs demand may be slowly recovering, he added.

Imperial reported a net loss of $188 million in the first quarter due to lower commodity prices and non-cash charges of $301 million, with $281 million of that due to a reduction in the value of its inventory as crude oil prices plunged in March and $20 million from a goodwill impairment.

It had a net profit of $293 million in the same quarter last year.

Fellow oilsands producers Husky Energy Inc. and Cenovus Energy Inc. both reported writedowns and losses earlier this week.

Imperial’s revenue and other income totalled $6.69 billion in the quarter, down from $7.98 billion in the first quarter of 2019.

Imperial’s average realized bitumen price averaged $18.08 per barrel in the first quarter of 2020, compared to $48.85 per barrel in the first quarter of 2019.

Crude-by-rail shipments averaged 97,000 bpd from its co-owned Edmonton rail terminal in the first quarter of 2020, up from 53,000 bpd in the fourth quarter of 2019.

Shipments by rail fell to about 10,000 bpd in April and are being phased out as pipeline space is freed up amid industry-wide production cutbacks due to current low oil prices, said Corson.

Analysts said Imperial beat their expectations on production and on cash flow, the latter thanks to higher profits from its refining and marketing sector.

Imperial cut its 2020 capital spending plan at the end of March by $500 million to between $1.1 billion and $1.2 billion and targeted a reduction in expenses by $500 million compared with 2019 levels in an effort to deal with impact of the pandemic.

 


Incoming Suncor president and CEO Mark Little addresses shareholders. Photo: Jeff McIntosh Canadian Press

Suncor CEO predicts slow recovery for sector from pandemic demand crunch

Incoming Suncor president and CEO Mark Little addresses shareholders. Photo: Jeff McIntosh Canadian Press

Suncor president and CEO Mark Little. File photo: Jeff McIntosh Canadian Press

CALGARY – Consumer demand for fuel is growing slightly after a sudden decline due to measures to deal with the COVID-19 pandemic but the CEO of Suncor Energy Inc. says he doesn’t expect a full recovery for his company or the Canadian energy sector until at least 2022.

The Calgary-based oilsands and refining giant surprised analysts by cutting its quarterly dividend by 55% to 21 cents per share as it reported a first-quarter net loss of $3.525 billion on Tuesday.

It had 18 years of consecutive annual dividend increases, with the latest announced in February.

The cut was necessary as the company resets its target of breaking even at a West Texas Intermediate price of US$35 per barrel, down from the previous mark of US$45, said CEO Mark Little on a conference call on Wednesday.

“Although we expect the crude market to substantially recover by 2022, the risk of an extended period of economic uncertainty, translated into weaker commodity prices and higher volatility, remains possible,” he said.

“In the second quarter, we know our industry is being challenged by … a significant supply and demand imbalance which has resulted in the largest collapse in crude prices ever. These market conditions require decisive leadership and action.”

The company, which sells fuel across Canada through its Petro-Canada network, has seen a reduction in demand of 50% for gasoline, 70% for jet fuel and 20% for diesel, Little said.

As North American oil storage fills to near capacity, any rebound in upstream oil production must be led by recovery in the downstream and that means it depends on when governments reopen the economy and consumers feel confident about travelling again, Little said.

There will be further delays as the high level of crude inventories is drawn down, he added.

Chief financial officer Alister Cowan said on the call he expects that Suncor’s gross debt of about $20 billion will grow by $2 billion or $3 billion this year, but the company will break even on a cash flow basis in 2021.

In a report, analyst Michael Dunn of Stifel FirstEnergy estimated the dividend cut will save Suncor about $1.56 billion per year.

“While not altogether surprising, the cut was not a sure thing given Suncor’s liquidity and track record of dividend increases. We agree with the move,” he said.

Suncor’s capital spending plan for 2020 is being cut to $3.8 billion, a further reduction of $400 million compared with its recent guidance and down $1.9 billion or about one-third compared with its original 2020 plan.

It added it intends to cut operating costs by $1 billion or 10% this year compared with 2019 levels.

Suncor registered an impairment charge of $1.38 billion on its 54.1% share of the Fort Hills oilsands mine it operates and $422 million against its share of the East Coast offshore White Rose and Terra Nova assets.

Suncor also recorded a $397-million after-tax inventory writedown, as well as a $1-billion unrealized after-tax foreign exchange loss on U.S. dollar denominated debt.

Due to lower demand for refined products, Suncor is reducing its outlook for refinery throughput to between 390,000 and 420,000 barrels per day from the previous goal of between 440,000 and 460,000 bpd.

 

 


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Parkland Fuel sees $79 million loss in first quarter on higher revenues

The Calgary-based company says that equalled a loss of 53 cents per diluted share, compared with a profit of 52 cents per share or $77 million a year earlier.

Revenues for the three months ended March 31 increased 3.4% to $4.36 billion from $4.2 billion in the prior year.

Fuel and petroleum product volume increased 12% to six billion litres.

Analysts expected Parkland to lose one cent per share on $4.37 billion of revenues, according to financial markets data firm Refinitiv.

The company says it removed more than $300 million of capital expenditures from its plans this year.


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Parkland nears completion of Burnaby refinery turnaround

Parkland Fuel Corporation is nearing completion of the required work for the 2020 Burnaby refinery turnaround and has begun the startup sequence for the facility.

In statement, the company explained: “We expect an approximate two-week process to reach full operational capability when accounting for additional coronavirus preventative safety measures. COVID-19 has required Parkland to change processes and procedures in response to guidance from Provincial health authorities. This has led to a decrease in the number of staff on site and lower productivity.

“I would like to thank the Parkland team and contractors for all their hard work during this maintenance event,” said Ryan Krogmeier, SVP, supply, trading, refining and HSE. “We are proud of the outstanding safety results to date and the effort exhibited by everyone involved.”


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How low will gas go?

Screen Shot 2020-03-24 at 12.28.39 PM“Oil markets are poised to get worse before they get better, ushering in a new era for petroleum,” U.S.-based Citi Bank said in a recent note to its clients. Already, oil is being produced below the cost of production, with prices falling for Western Canadian Select Crude to under (US) $10 (actually hit (US) $7.36) a barrel for the first time.

Simply, the petroleum market got hammered with a one-two blow, where demand has fallen off sharply and supply has increased dramatically. The result is dispenser prices that few of us have seen in recent years.

The COVID-19 concern has Canadians staying at home and working in place. This means less fuel usage for things like commuting and air travel. Less demand drives prices downward. Add to this the recent dust-up between Russia and the Saudis over OPEC production targets, whereby both parties are pumping oil like there is no tomorrow. Russia is selling at a loss as a way to build European market share and the Saudis (and UAE) are battling back with excess production to bring pressure onto Russia in a bid to get them to ratchet back well flows. The upshot is a glut of petroleum products at a time when world demand is at an all-time low.

The Russians have said they have enough reserve capital to keep up this fight well into next year. The Saudis have cash to burn, as well as low production costs, and have said they will keep up pressure till the sides get back to the bargaining table.

Here in Canada Syncrude and Suncor have scaled back maintenance work on upgraders due to COVID-19 and the companies’ inability to obtain workers for the task. The result here is that synthetic crude continues to flow at a time when levels were set to be throttled back. The result is even more capacity in the system.

The outcome is that gasoline prices have fallen and could drop even more. Some analysts predict an additional 10% to 15% decline under canopy as we move into April. A look at prices this week sees Vancouver around the $1.00 mark for a litre of gas. This is a drop from the high of $1.70 we saw last year. British Columbia is around 0.75 cents a litre. Ontario is reporting sales of 0.59 cents and Calgary motorists discovered pumps offering prices of 0.55 cents Tuesday morning. Nova Scotia is selling as low as 0.66 cents.

The bottom line is that Canadians can expect gas prices to decline further over the short term with prices in Ontario possibly coming in around the 0.60 cent mark later next month. Until Russia and OPEC makeup and play nice expect the barrel price to continue to stay low for the foreseeable future.


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Oil price crash: What it means for Canada’s fuel prices?

esso_bearspaw_thumbWorld oil prices are in free fall after Saudi Arabia slashed its crude sale price Sunday, signalling the start of a price war after OPEC talks with Russia broke down without an agreement on production cuts. The threat of increased crude supply, on top of prices already weakened over fears the global outbreak of a novel coronavirus would lead to lower fuel consumption, triggered the crash. The turmoil is already affecting Canadian companies and consumers.

What does it mean for fuel prices?

Lower oil prices usually mean lower prices at the pump for drivers, although consumers should expect a lag before they see cheaper gas. Refineries work their way through inventories purchased at higher prices before the price drop. Despite the advent of carbon taxes, the price of oil is still the largest component in the price per litre of gasoline, diesel and other fuels, so drivers will eventually notice the drop.

How does it affect Canadian oil prices?

Crude oil is traded on a global market so when oil prices fall in New York or London, they also fall in Edmonton. Heavy-oil benchmark Western Canadian Select is a blend of made of oilsands bitumen and light oil that allows for better pipeline flow. Unlike other commodities, WCS futures are based on the price difference with U.S. benchmarks and therefore reflect changes in those prices. On the other hand, world oil trade is conducted in U.S. dollars, so the plunging loonie will help mitigate the effect of lower oil prices in Canada.

How does this affect Canadian oil and gas companies?

Lower commodity price forecasts are already causing producers to cut spending and payouts to their shareholders. On Friday, Vermilion Energy Inc. halved its dividend. The day before, Canadian Natural Resources Ltd. trimmed $100 million from its 2020 capital spending budget and said it could cut another $300 million to $400 million if market turmoil continues. Lower oil price forecasts were partly blamed for the recent shelving of the $20.6-billion Frontier oilsands mining project by developer Teck Resources Ltd.

How does this affect investors in the stock market?

Energy companies were among the hardest hit Monday on the Toronto Stock Exchange, with Cenovus Energy Inc. and MEG Energy Corp. each down more than 40 per cent in early afternoon trading. Heavily weighted Enbridge Inc. dropped 13.1%. The TSX energy subindex, which tracks the market value of Canada’s largest oil and gas companies, dropped sharply, trading as low as 29.6% below its Friday close. Energy has the second highest weighting of any sector on the TSX, at 15.9%, so a drop in energy stock prices drags down the index.

How will lower crude prices affect the Canadian economy?

Globally, Canada is the fourth-largest producer and fourth-largest exporter of oil and the energy sector accounts for more than 11 per cent of its gross domestic product. That means lower prices are a “huge negative” for the country, says Sherry Cooper, chief economist for Dominion Lending Centres. The scale of the economic hit will depend on how long lower prices persist, she says.

 


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Innovation at the pumps

Manufacturers up the ante with new tech

Fuel dispensers and related equipment have come a long way since 1907 when Canada’s first retail gas site opened to the public in Vancouver at Cambie and Smyth. Back then it was considered a win just getting fuel safely from the storage tanks to the car. Today, dispensers are still an interface between customers and the retailer but they also perform a range of new tasks and have capabilities designed to enhance the forecourt experience.

Screen Shot 2020-02-03 at 4.34.33 PMA good case in point of leading-edge dispenser technology is Wayne Fueling SystemsOvation 2 series. Usinga large dispenser mounted video screen with customer interface, Ovation 2 drives targeted product messaging with dedicated media that translates into c-store sales. Wayne reports that an enhanced media-at-pump experience creates a 16% lift in traffic from the forecourt to c-store and a 3% to 5% hike in sales. Devices are flexible in capability with media messaging changing through the day-parts. This means morning customers are offered coffee and breakfast sandwiches while afternoon customers might like the two-for-one energy drink promo. Specials for car wash, wiper blades and wiper fluid are constant through the day.Ovation2 also has 25% more space for branding and other messages dedicated to driving secondary sales.

Media dispensers are a proven tool that increases c-store sales. For example, Nielsen-Lieberman Research found Pepsi sales increased 20% and candy purchases were up by 69% following the installation of dispenser media displays.

Wayne is a division of Dover Fueling Solutions, a company with a range of brands that offer unique and innovative products for the forecourt. For example, its Tokheim division offers its T-Media dispenser, a product popular in EU countries. T-Media features a 17-inch display monitor, the largest that we have seen. Like Ovation 2, media is targeted to the motorist and offers day-part messaging as well as lots of interactivity and ease of programming.

Not to be outdone, Gilbarco Veeder Root has brought Encore Experience to the market in the US. This system offers a cloud-based open applications platform that enables retailers to customize on-screen experiences. This creates excitement at the forecourt and drives customers to convenience store purchases. Retailers can create unique apps, use Gilbarco-built platforms or go with a third-party-developed app to deploy content and functionality to Encore dispensers’ 10.4-inch display screens. 

Like other media dispenser systems, Encore drives loyalty, creates repeat business and adds to in-store sales. Simply, motorists are captive for the few minutes they fill their tanks. The dispenser creates engagement that shows off content and products. Here, retailers can customize existing digital apps with graphics such as backgrounds, icons and logos. On board are existing applications that allow for games, ticker information, survey and coupons. Customers can even order c-store items at the dispenser and pay at the same time they purchase gas.

Screen Shot 2020-02-03 at 4.34.44 PMBennett Pump has been making fuelling devices for more than a century and many Canadian operations utilize the company’s new NV line of dispensers. These products offer an enhanced operating economy with the company suggesting energy costs are 60% lower than other dispensers. It also offers one of the best fuel meters in the business, something operators like because accuracy puts money in their pockets. The systems also come with a range of media displays that range from 7-inches to 10.5-inches.

Robotic fuelling making gains

Business researchers MarketsandMarkets project the robotic refuelling system market is expected to grow from (US)$25 million in 2019 to (US)$2.2 billion by 2030. Driving this growth is the lowering cost of robotics at the forecourt as well as enhanced safety and security at the site. Challenges include the replacement of manual gas caps with automated fuel caps. Already some car manufacturers, such as Ford and Chrysler have gone this route.

Stockholm-based Fuelmatics is an industry leader in robotic fuelling. Since their market introduction about 10 years ago the company has seen gains in use from sectors such as mining, long haul trucking, urban transport and other large-scale fuel users. Last year they inked their first US deal for the Fuelmatics 5000 with Airport Plazas, a multi-service retailer that offers gas, diesel, CNGand E85at nine airports in the US such as JFK, La Guardia and Newark airports.

The Fuelmatics 5000 has smartphone payment capability, compact design, and an operating speed that can fill tanks in about three minutes. The system can handle all liquid and gas fuels, so it is ready for hydrogen stations as they are built.

Fuelmatics’ device works by establishing a sealed connection with the car before it opens any flow valves. Vehicles approach the unit, drivers activate it with their mobile device where their credit card info is stored. A robotic arm opens the gas hatch on the car and makes a seal with the nozzle. As an added blessing the system recovers 100% of the vapour and condenses it back to fuel.

Nozzle technology keeps pace with trends

The nozzle is the direct interface with the customer. If nozzles spray fuel, leak or have an unwieldy handle grip, operators can run into unhappy customers. Manufacturers have been hard at work to make the nozzles and handles both ergonomic and efficient. One instance of this innovation comes from Husky a 70-year old company that has recently introduced the EZ Lever nozzle.

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Husky is represented in Canada by Red Leonard and Associates. Here, sales manager Jim Rodd tells OCTANE that the EZ Lever is attractive to people with disabilities such as arthritis. “The nozzle operates more smoothly and customers have more control over how much fuel they dispense,he says noting that the EZ Lever is a two-piece design that allows the poppet to open with just five pounds of force. Most nozzles on the market ask customers to use 10 pounds of force or more to get dispensers moving gas to vehicles.

Husky has also introduced the XS nozzle. Rodd reports this device has shut-off features to enhance safety. For example, the nozzle will not activate if the pump is not on or the cars gas tank is full or the leak detector has not fully cycled. The nozzle also sports a stainless steel spout bushing that prevents sensor tip damage. If the nozzle is dropped or is raised above horizontal Huskys Flo-Stop device shuts the nozzle down. An important introduction here is StreamShaper, a technology that works to reduce turbulence in fuel flow that results in less splashback. Pants and dress shoes have never been happier.                     

Gilbarco Veeder Root is another prominent manufacturer that is making it less difficult to fuel vehicles. This company has come forward with Ergo, a dispenser nozzle that is designed for easier one-handed operation. The company reports that Ergo offers a lever that is 66% easier to pull than their previous model. The nozzle is also 12% lighter and uses heat-treated roller pins at the drive shaft assembly to better resist the elements and hold up to heavy use. The Ergo also handles the action in extreme environments with performance rated for temperatures from minus 40ºC to 51.6ºC.

Storage tank improvements

OPW is a major name in fuel storage and they have been staying up-front thanks to regular developments. For example, they recently released the High-Flow Loop System. This equipment is an extension of OPW’s FlexWorks Loop System. The company suggests the new systems are ideal for truck stops where there can be multiple lanes for transports and blended service for passenger cars and light trucks. “High-volume sites were a challenge with the offset product inlet configurations on high-speed dispensers as well as a way to incorporate our larger diameter 3-inch flex pipe,” says Ed Kammerer, director of marketing and global product strategy for OPW Retail Fueling. “Essentially, the High-Flow Loop System takes the components of the original and ‘supersizes’ them so they can deliver higher flow rates – all while maintaining the original system’s streamlined installation, operation, monitoring, maintenance, repair and replacement capabilities,” he says.

For fuel providers with compromised single wall storage tanks, ZCL has a solution. Their Phoenix System now offers a less expensive way to deliver containment when single wall units fail or site challenges make removal of existing tanks a challenge. The upgrade system consists of two corrosion-resistant laminates with a proprietary glass fabric between the laminates to create an interstitial space. The interstice can be either dry or hydrostatically monitored. The Phoenix System, when applied onsite by trained installers, is compatible with biofuels, including ethanol-blended fuels and bio-diesels.

Originally published in the January/February issue of Octane. 


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Tech talk at the pump: ‘Alexa, pay for gas’

Screen Shot 2020-01-07 at 11.39.15 AMExxonMobil is teaming up with payments and financial technology provider Fiserv to enable drivers pay for gasoline using Amazon Alexa.

The initiative will first roll out for more than 11,5000 U.S. Exxon and Mobil gas stations, giving users of Alexa-enabled vehicles, Echo Auto and other Alexa-enabled mobility devices to pay at the pump with the vocal command “Alexa, pay for gas.”

The transactions will be processed by Amazon Pay, allowing users to use the payment information stored in their Amazon account, and powered by digital commerce technology from Fiserv.

pumping-gas-500-x-400_0After drivers make the payment command, Alexa confirms the gas station location and pump number. Fiserv technology will then activate the pump and facilitate token generation to help ensure a secure payment experience.

“We’re excited to bring new technology and better experiences to the gas station,” said Eric Carmichael, Americas fuels marketing manager at ExxonMobil. “We build and seek out technology that will wow our consumers, providing both ease of use and security.”

The companies announced the new payment option in advance of CES 2020, held Jan. 7-10 in Las Vegas, and will demonstrate it for the first time in the Amazon Automotive booth.

“As consumer expectations change, there is growing demand for frictionless interactions that span the digital and physical worlds,” said Devin McGranahan, senior group president, global business solutions at Fiserv. “The age of connected commerce is here, and voice-activated smart devices will play a pivotal role in the future of payments by streamlining the way consumers make purchases every day.”

Based in Spring, Texas, ExxonMobil is the largest publicly traded international oil and gas company.

Originally published at Convenience Store News.