Sunoco LP (SUN) Business Profile

What it does

Sunoco LP is a master limited partnership that distributes motor fuel and operates energy infrastructure. It supplies fuel to independent dealers, distributors, commercial businesses and its own convenience stores. It also transports and stores petroleum products for its distribution business and other customers.

The company operates across North America, the Greater Caribbean and Europe. Its network includes pipelines and terminals, while its fuel business supplies Sunoco and partner-branded locations as well as unbranded customers. Alongside gasoline and diesel, Sunoco distributes products such as aviation fuel, marine fuel, propane and lubricating oil.

Sunoco has four operating segments: Fuel Distribution, Pipeline Systems, Terminals and Refinery. The refinery segment includes the Burnaby Refinery in British Columbia, which makes gasoline, diesel and jet fuel. Its products supply customers including Sunoco’s retail network and Vancouver International Airport.

Sunoco is headquartered in Dallas, Texas. Joe Kim is its president and chief executive officer. The partnership is managed by a general partner owned by Energy Transfer; Energy Transfer also controls SunocoCorp, which appoints the general partner’s board. Sunoco had 8,910 employees in FY2025.

How it makes money

Sunoco earns money from selling fuel and other petroleum products, operating convenience stores, and providing transportation and storage services. Its operations span the route from buying or refining fuel to delivering it to businesses and retail locations.

In Fuel Distribution, independent dealers and distributors buy fuel from Sunoco and resell it to motorists. Sunoco-branded supply contracts generally include both time and volume commitments. At commission agent locations, Sunoco controls the fuel inventory and the price at the site. It also sells fuel to commercial and government customers, some of whom buy by the load or in bulk without exclusive contracts. Convenience stores operated by Sunoco generate merchandise sales, while the distribution channel also brings in credit card service fees, franchise royalties and rent from properties leased to independent operators.

Pipeline Systems transports crude oil, refined products and ammonia. Interstate petroleum pipeline rates are regulated, and Sunoco generally adjusts its rates annually within prescribed ceilings tied to an inflation index. Its Terminals segment stores and distributes products for Sunoco and third parties. It also processes transmix—the mixture created when different refined products meet in pipelines and terminals—back into saleable gasoline and distillates.

The Burnaby Refinery turns crude oil into products including gasoline, diesel and jet fuel. Much of its output is sold through Sunoco’s British Columbia retail network and to commercial customers. Sunoco also owns an interest in SARA, a refinery based in Martinique. Fuel distribution volumes are typically higher in the second and third quarters, when demand for motor fuel rises.

Customers and how it sells

Sunoco supplies independent retail operators, other fuel distributors, commercial businesses, municipalities and industrial customers. Its dealer and distributor customers generally purchase fuel under long-term agreements, while commission agents operate sites where Sunoco controls the fuel inventory and price. Sunoco also operates convenience stores directly.

In FY2025, 7-Eleven represented 13.0% of revenue. Sunoco describes its supply agreement with 7-Eleven as a take-or-pay contract. Its other commercial customers include petroleum exploration and production businesses that receive fuel, propane and lubricating oils.

Sunoco distributes motor fuel across the United States, Canada and the Greater Caribbean, and operates energy infrastructure across North America, the Greater Caribbean and Europe. The Burnaby Refinery supplies British Columbia through Sunoco’s retail network, Vancouver International Airport, and commercial and cardlock customers. Sunoco also continues to supply its Hawaii fuel needs from Burnaby.

Its terminals serve both the fuel distribution business and outside customers. In January 2026, the acquisition of TanQuid added terminals in Germany and Poland. Sunoco’s pipeline and terminal operations serve customers seeking transportation, storage and distribution services.

Suppliers and costs

Sunoco buys motor fuel primarily from independent refiners and major oil companies. Its largest branded fuel suppliers by volume are Chevron, Exxon, Phillips 66 and Valero. Branded supply agreements generally have an initial term of three to five years. Sunoco also buys fuel in bulk, either at prices posted at supply terminals or under contracts tied to market indices.

The company sources fuel globally and transports it by pipeline, barge, vessel, truck and rail. It uses its own vehicle fleet as well as third-party and affiliated transportation providers. In Canada, it primarily distributes through third-party carriers and independent brokers. Sunoco uses derivatives matched to anticipated inventory usage to mitigate fuel inventory risk.

Burnaby consumes primarily sweet conventional and sweet synthetic crude oil. The refinery also uses bio feedstocks and blends lower-carbon fuels to meet applicable requirements. Across the business, costs include fuel and merchandise inventories, transportation, operating expenses, leased locations, debt service and capital expenditures. Working capital needs fluctuate with crude oil prices and the timing of tax, interest and rent payments. Sunoco expects increasing pipeline regulatory compliance costs.

Competitive position

Sunoco competes with independent fuel distributors in markets it describes as highly competitive and fragmented, with narrow margins. Retail competition includes service stations, convenience stores, supermarkets and other outlets. Price, access to major brands, service, location and operating costs affect competition. Sunoco does not name individual competitors in its competition description.

Its pipelines compete with other pipelines and, for shorter routes, trucks. Transportation charges, service and proximity to customers matter. Terminals compete on location, price, service and their ability to handle different products. Burnaby competes with other refineries, including Alberta-based refineries selling into British Columbia.

Our reading: Sunoco’s distribution network and long-term dealer contracts provide some competitive protection, but narrow margins and fragmented markets limit that protection. Our reading: Pipelines and well-located terminals can be harder to replicate, particularly where permits for new facilities are difficult to obtain, although competing infrastructure and transportation options remain relevant.

Sunoco’s exclusive wholesale rights to several fuel brands, its supply relationships and its own logistics network support its distribution offering. It also uses its refinery, terminals and transportation assets to supply customers across its network.

Growth opportunities

Sunoco seeks to grow through acquisitions, new customer contracts and investment in its existing infrastructure. It looks for branded dealers, distributors, commission agent locations and commercial customers, as well as contracts for independently operated sites purchased from other distributors.

The Parkland acquisition, completed in October 2025, added fuel distribution, marketing, convenience retail and the Burnaby Refinery. Sunoco says Parkland contributions and synergies are ahead of schedule. The acquisition also added rail assets that Sunoco uses to move diesel from the Midwest to mid-Atlantic markets.

In January 2026, Sunoco completed the TanQuid acquisition, adding fuel terminals in Germany and Poland. Sunoco has also made new pipeline connections to bring on customers and identified opportunities to build terminal tanks in South America, the Caribbean and Europe. Some of those tanks would also support its fuel distribution business.

Sunoco’s multi-year guidance calls for at least $500 million a year of bolt-on acquisitions, and the company expects to surpass that amount in 2026 and future years. It also expects to materially exceed its initial 2026 adjusted EBITDA guidance. Acquisitions require financing and integration, and Sunoco’s ability to complete them depends in part on obtaining acceptable terms.

Structural risks

• Fuel prices and demand: Changes in motor fuel prices and demand can affect results. Demand may also change as consumers adopt alternative fuels or vehicles become more fuel-efficient. Sunoco says higher fuel prices create a headwind to distribution margins.
• Operations and environmental liabilities: Refining, transporting and storing fuels involve operational hazards. Releases can lead to cleanup obligations, claims and regulatory costs. Sunoco has recorded estimated liabilities for contamination at fuel storage and gasoline store sites.
• Acquisitions and financing: Growth can be affected by failure to find acquisitions on acceptable terms or integrate acquired assets. Debt levels, interest rates and debt agreement restrictions can also affect cash flows and the ability to make distributions.
• Regulation: Environmental, renewable fuel, pipeline safety and product-quality rules can require spending or result in liabilities. Regulated pipeline rates may not increase enough to reflect actual cost increases.
• Partnership structure: Energy Transfer owns Sunoco’s general partner and controls SunocoCorp, which appoints the general partner’s board. Sunoco must also reimburse its general partner and affiliates for services provided to it or on its behalf.

Bottom line

Our reading

Our reading: Sunoco combines a fuel distribution business with infrastructure and refining assets that help it buy, move, store and sell products across several markets. [item1] Its long-term contracts and physical network offer some stability, but fuel margins, refinery conditions, environmental obligations and acquisition financing remain material exposures. [item1] [item1a] Growth depends in part on integrating acquisitions and finding further projects on acceptable terms. [item1a] [call_qa]