Stabilis Energy and Flint Hills Resources have announced plans to build up to five natural gas liquefiers to serve oil field operations, with the first facility planned to launch in the Eagle Ford Shale in January 2015.
The first liquefied natural gas production facility will be located in George West, Texas and produce up to 100,000 gallons of liquefied natural gas per day, the companies said. They also plan to launch facilities in North Dakota and West Texas in 2016 and 2017, pending land procurement agreements.
Additional facilities would come online by 2017.
The U.S. shale drilling boom has unleashed a glut of low-cost natural gas onto the market, making it an attractive alternative to diesel to fuel the high-horsepower engines of oil field equipment used for drilling and hydraulic fracturing.
“We believe this venture will allow Stabilis to rapidly deploy LNG liquefiers across all of the major oil and gas shale plays in North America,” said Casey Crenshaw, president and CEO of Stabilis Energy, in a written statement. “Stabilis will provide our oil field customers with a reliable source of LNG fuel that will help them reduce operating costs using a reliable domestic fuel source.”
Stabilis, based in Beaumont, said it has begun taking orders for the LNG supply. The company is assisting customers with conversion of traditionally powered equipment to dual-fuel engines that can partially run on natural gas.
Flint Hills Resources, a Koch Industries subsidiary that operates refining and chemical plants, will share management committee responsibilities with Stabilis.
“We are very excited about the first plant location in the Eagle Ford and working with customers who currently supply crude oil to our refinery in nearby Corpus Christi,” said Jeremy Bezdek, managing director of Innovation for Flint Hills Resources, in a written statement.