After a lengthy review, the Federal Trade Commission has imposed major conditions on a proposed gas terminal and pipeline deal in Maine between ExxonMobil and Canada's Irving Oil, claiming it could have resulted in higher gas prices for consumers.
In a deal announced in November 2009, Irving planned to buy ExxonMobil's South Portland and Bangor terminals - that is, storage tanks and loading “racks” that pump fuel into tanker trucks for delivery. Also, Irving planned to acquire ExxonMobil’s intrastate pipeline connecting the two terminals.
Irving and ExxonMobil are two of three firms that independently offer gasoline terminaling services in the in the Bangor/Penobscot Bay area, and two of only four in the South Portland area - a level of consolidation that raises a clear antitrust red flag.
“Irving would likely be able unilaterally to raise the price for or restrict the availability of gasoline terminaling services…and raise gasoline prices to customers served from this area’s terminals,” according to the FTC.
The FTC’s proposed order, made public yesterday, requires Irving give up its acquisition rights to ExxonMobil’s Bangor terminal and intrastate pipeline to Buckeye Partners, L.P.
Buckeye and Irving will form a joint venture to to acquire ExxonMobil’s South Portland terminal, with each company owning 50%.
“We continue to closely monitor deals in the energy sector to ensure that consumers of petroleum products are served by competitive markets,” said FTC Bureau of Competition Director Richard Feinstein in a news release. “We expect the relief obtained here to accomplish that goal and protect consumers from higher gas prices.”
Irving was represented by Raymond Jacobsen and Joel Grosberg of McDermott, Will & Emery in Washington. Jacobsen could not be immediately reached for comment.