Growmark Acquires Terminal From Plains LPG Services

(December 16, 2019) — Retail and wholesale propane customers in the tristate area of Iowa, Illinois, and Missouri will soon see a new name on the terminal outside Fort Madison, Iowa. Growmark Inc. (Bloomington, Ill.) has reached an agreement with Plains LPG Services LP to acquire the facility. Growmark, a farmer-owned cooperative, owns five other terminals in Iowa, South Dakota, Ohio, and Missouri. It also owns the FS trademark, which is used by affiliated member cooperatives.

Transaction terms were not released. Growmark intends to complete the transition and have the facility operating under its ownership as quickly as possible. “The Fort Madison terminal is situated in the heart of our footprint,” said Carol Kitchen, Growmark vice president of energy and logistics. “Acquiring this terminal is another step in our strategy aimed at creating the most efficient and reliable supply chain possible for our members and customers. This infrastructure becomes particularly important in periods of extreme demand such as we’ve experienced this fall.”

Growmark comments that with colder temperatures and the late harvest continuing across much of the Midwest, propane is in high demand. The cooperative and its FS system are adjusting supply chains and deployment of assets to respond to the current propane infrastructure challenges.

“While there are historically high U.S. inventories of propane, the pipeline infrastructure is maxed out and cannot fully support extreme demand periods in the Midwest,” Kitchen said. “We share our customers’ frustrations and are doing everything we can to minimize service delays.”

Over the past five years, Growmark has made a significant investment in new rail transportation and storage facilities. The extra capacity of these assets has been helpful, but the cooperative is also securing propane from additional supply points both inside and outside of its traditional territory. Extended travel times to source propane places a greater demand on logistics assets.

“While we can’t speak for other shippers, we currently have product volume committed from our suppliers and are doing what we can to work through or around the limitations of the propane infrastructure,” Kitchen said.

(SOURCE: The Weekly Propane Newsletter, December 9, 2019. Available by subscription)