UPDATED: UGL, Great Southern snare BP contracts

National engineering group UGL and WA-based bulk fuel distributor Great Southern Fuel Supplies have struck agreements with BP to operate and maintain some of the petroleum giant's facilities.

UGL has signed a $190 million joint venture contract to maintain BP's 17 fuel terminals across Australia.

The three-year contract involves a 50:50 joint venture between UGL and BP, and could be extended for another three years.

The joint venture will carry out all engineering, maintenance and project works at BP's fuel terminals.

"UGL has enjoyed a longstanding relationship with BP since the 1990s providing maintenance services at BP's Kwinana refinery in WA," chief executive Ross Taylor said.

"The contract is also strategically significant for UGL extending our capabilities to provide an integrated operations and maintenance solution in partnership with BP to optimise the performance of their assets."

Separately, BP plans to outsource the operation of its regional fuel terminals across Australia.It intends to appoint Great Southern Fuel Supplies to operate its regional depot and logistics business in Carnamah, Geraldton and Kewdale in Western Australia.It also plans to establish a joint venture with Lowes Petroleum to operate its depots in most of regional Queensland, New South Wales and Victoria, and has an agreement with Toll to outsource logistics operations in Tasmania.  

Great Southern Fuel Supplies originally started in Lake Grace in July 1976 and has grown to incorporate depots at Katanning, Narrogin, Albany, Corrigin, Koorda, Wongan Hills, Moora, Merredin and Jerramungup.

The company has grown from a one-truck operation started by directors Allan & Faye McWhirter and now operates and/or supplies over 65 of the state's rural BP retail outlets and delivers to metropolitan retail sites and BP commercial accounts.

"By partnering with trusted, established regional distributors, BP believes we can compete better in a changing landscape and provide the responsive customer service our regional customers demand and deserve," the company said in a statement."These decisions are driven by the significant increase in competition over recent years in terminal competitors and tank capacity, and across the regional business from traditional and new players."

Subject to regulatory and other approvals, BP plans to transition these businesses across to the new operating entities during the second half of 2015.

“These changes to our business go beyond restoring our competitive edge. We are reinventing our business to be more responsive to our customers and become the most preferred fuels brand in Australia and New Zealand”, said Andy Holmes, president of BP Australasia.

“They align with our strategy of growth in our fuels business and increased brand presence in key markets across Australia and will enable us to concentrate our investment in our fuels business to enhance our customer offer.

“This will help to secure BP’s position, particularly given the rapidly changing downstream landscape in Australia and the challenging external environment.”