What are Sprague Resources Lp's Business Segments?
Refined Products
The products we sell in our refined products segment can be grouped into the
following categories: distillates, gasoline and residual fuel oil and asphalt.
Distillates. We sell four kinds of distillates: heating oil (both unbranded
and our proprietary premium HeatForce® heating oil brand), diesel fuel (both
unbranded and our proprietary premium RoadForce ® diesel fuel brand), kerosene
and jet fuel.
Natural Gas
We sell natural gas and related delivery services to customers primarily located
in the Northeast and Mid-Atlantic United States. We deliver natural gas to customers
through utility interconnections of pipelines and manage interactions with utilities
on behalf of our customers. We sell natural gas pursuant to fixed price, floating
price and other structured pricing contracts. We utilize physical purchase instruments
as well as financial and derivative instruments both over the counter and through
exchanges such as the Intercontinental Exchange Inc. (“ICE”) and
the New York Mercantile Exchange ("NYMEX"), in order to manage our
natural gas commodity price risk.
In order to manage our supply commitments to our customers and provide operational
flexibility and arbitrage opportunities, we enter into supply contracts, commitments
for pipeline transportation capacity, leases for storage space and other physical
delivery services for various terms. We believe that entering into these types
of arrangements provides us with potential opportunities to grow our existing
customer relationships and to pursue additional relationships.
Materials Handling
Materials handling consists of the movement of raw materials and finished goods
through our waterfront terminals. We utilize our terminal network to offload,
store and/or prepare for delivery a large number of liquid products, bulk and
break bulk materials and provide heavy lift services and other handling services
to some of the same customers that we supply with refined products and natural
gas. For the year ended December 31, 2016, our materials handling segment accounted
for 2% of our total net sales.
We are capable of providing numerous types of materials handling services, including
ship handling, crane operations, pile building, warehouse operations, scaling
and, in some cases, transportation to the final customer. Because the products
we handle are generally owned by our customers, we have virtually no working
capital requirements, commercial risk or inventory risk. Our materials handling
contracts are typically long-term and predominately fee-based.
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