Tenneco Gas Marketing Co. Introduces New Program to Market Natural Gas to Retail Customers

Strategic Insights -

Tenneco Gas Marketing Co. has introduced a new program, the Tenneco Alliance Program (TAP), to market natural gas to retail customers throughout the country. The program leverages oil jobbers to buy and market natural gas to retail customers on local distribution company (LDC) systems. The program aims to capture a larger share of the $9.3 billion commercial market currently being served by LDCs. By partnering with fuel jobbers, TGM will be able to reach more retail consumers without the high overhead of setting up regional marketing offices.

Key Takeaways:

  • The Tenneco Alliance Program (TAP) is a new initiative by Tenneco Gas Marketing Co. to market natural gas to retail customers through oil jobbers.
  • The program has already partnered with 18 of the largest fuel jobbers in the country, with a goal of reaching 30-40 jobbers to double TGM's current gas sales of 1.5-1.75 Bcfd.
  • The commercial market sector, which includes small industrial plants, laundromats, hospitals, and apartment buildings, has been identified as a high-margin market sector that TAP aims to capture, valued at $9.3 billion.
  • Fuel jobbers are well-positioned to sell natural gas to their existing customers, as many already have business relationships with target customers and have staff in place for marketing and sales.
  • The program is designed to reduce overhead costs for TGM, as fuel jobbers will handle marketing and sales efforts with minimal additional investment required from TGM.
  • Keisel Group, one of the partner jobbers, has a long history of business, dating back to 1896, and has seen a significant growth in revenue, now operating as a $35 million-a-year business.
  • TAP is seen as a clear opportunity for jobbers like Keisel to expand their product offerings and make up for lost sales due to the shift from fuel oil to natural gas.

Statistics:

  • 18 fuel jobbers have already signed up for the Tenneco Alliance Program (TAP)
  • 30-40 jobbers are expected to participate in the program to double TGM's current gas sales of 1.5-1.75 Bcfd
  • The commercial market sector has a value of $9.3 billion and has traditionally been served by local distribution companies (LDCs)
  • Keisel Group operates as a $35 million-a-year business
  • Fuel jobbers sell approximately 10% more fuel oil than gas, based on past purchasing patterns

Sources:

  • [Tony Rexrode, President of Tenneco Gas Marketing Co.]
  • [Steve Daves, General Manager of Keisel Group]