Ferus Natural Gas Fuels Inc. (NGF) has bought out Encana Corp.'s half-stake in the companies’ joint venture (JV) liquefied natural gas (LNG) production facility in Elmworth, AB, which is set to start up in May.
The facility is to have 190,000 liter/day capacity; it was announced in late 2012 (see Daily GPI, Dec. 27, 2012). The project, near the Deep Basin oil and gas region, would produce LNG fuel for use in drilling rigs, pressure pumping services and heavy-duty trucks. Other high-horsepower applications for supply are to include rail, mining and remote power generation.
"Our experience with LNG has demonstrated significant cost savings and environmental benefits," said Encana Executive Vice President David Hill, who heads exploration and business development. "Encana remains a key customer of Ferus and has committed to a multi-year LNG supply agreement to service our field operations.
"Selling our interest in the plant allows us to focus on our core business and the execution of our new strategy.” No financial details were disclosed. Encana, one of the largest natural gas operators in North America, has been selling assets across North America to pare its debt and provide capital to support oil and liquids drilling.
In addition to Encana's commitment to using LNG fuel, "we are adding experienced Encana personnel to our team to ensure a seamless transition and exceptional service to our customers in the region," said Ferus NGF CEO Richard Brown. The transaction gives the Ferus unit full owner/operatorship of what is to be the largest merchant LNG plant in Canada. Plans are to expand it in the future.
Ferus NGF is privately held by The Energy & Minerals Group, an investor in North American oil and natural gas operations. The company, formerly Ferus LNG, supplied the first LNG-fueled well fracturing job in North America. It also is building two LNG liquefaction facilities with ENN Canada in Edmonton, AB, and Vancouver, BC (see Daily GPI, Nov. 19, 2013). It also is an equal partner in Eagle LNG partners, a consortium that plans to build out LNG infrastructure across the United States (see Daily GPI, Sept. 20, 2013).
Encana sold most of its U.S. LNG fuel distribution operations earlier in April to Stabilis Energy, which also supplies gas fuel to oilfield service operators (see Daily GPI, April 14).