LNG fuels consortium to build plants in Texas, other states

A group of alternative fuel and financial firms are planning to develop liquefied natural gas projects in Texas and five other states, aiming to sell cleaner and cheaper fuel to transportation, mining and oil and gas sectors.

California natural gas fuels company Clean Energy Fuels will build and operate micro-LNG plants for various regional projects in Florida, Washington, Colorado, North Dakota, Ohio and Texas. The company is the development and construction arm of the consortium, called Eagle LNG Partners, which also includes Canada’s Ferus Natural Gas Fuels and two GE-owned energy investment firms.

In South Texas, the group is looking into building a plant in the Eagle Ford Shale, where it would serve the local exploration and production sector, said Gary Foster, a spokesman for Clean Energy Fuels, which has a customer base that operates more than 30,000 natural gas-powered vehicles.

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Eagle LNG Partners emerges as natural gas accounts for only 0.1 percent of the transportation fuel used in the U.S., a figure that would jump to only 3 percent if the country did nothing else to expand its use of natural gas fuel, according to consulting firm McKinsey and Co.

Diesel fuel makers scoff at the claim that natural gas could replace diesel products as the fuel of choice for the country’s thirstiest engines, but big players like Royal Dutch Shell are moving into the market with plans for LNG plants.

The group cannot yet release other details about its potential projects or the amount it would invest in developing the market, said Andy Katell, a GE spokesman. He added each company — GE, Clean Energy Fuels and Ferus Natural Gas — has a one-third stake in the partnership.

Katell confirmed that LNG plants run $40 million to $100 million in construction costs.

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“With massive amounts of domestic reserves, America is facing a generational opportunity to move to a more secure, less expensive and cleaner-burning fuel,” said John Shepherd, managing director at a GE energy investment firm, in a written statement.

Ferus’ role in the partnership will center on cryogenic logistics, while the GE investment firms pump money into projects and dive into technological advancement, the companies said.

Dallas energy guru T. Boone Pickens owned 25.3 percent of Clean Energy Fuel’s outstanding shares at the end of June, according to regulatory filings. While Pickens is an active board member of the company, he will have no involvement in the operations side of the partnership, Foster of Clean Energy Fuel said.


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