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Second Joint Venture LNG Production Plant Set for Permian

With an initial plant slated to open early next year in the Eagle Ford Shale play, Stabilis Energy and Flint Hills Resources said Monday they plan to pursue a second joint venture (JV) by acquiring property in Odessa, TX, for development of another liquefied natural gas (LNG) production plant in Texas to service oil/gas field operations.

The JV partners said the Permian-based plant would have a 100,000 gal/d capacity to serve high horsepower oilfield fuel applications in West Texas. "Stabilis will begin taking orders for LNG supply immediately and production could begin in 2016," a company spokesperson said.

In a previously announced deal with the Koch Industries' Flint Hills unit, in Beaumont, Stabilis said it plans to open its first LNG production facility in George West, TX, in January to service oilfield customers in the Eagle Ford. That facility would also be able to produce around 100,000 gallons/day (see Daily GPI, April 14).

The latest proposal is subject to receiving final approval from management at both companies. If approved, construction could begin early next year.

Stabilis and Flint Hills stressed they are offering turnkey LNG fuel solutions, including LNG production, transportation and logistics, field service, and cryogenic service. "The joint venture is currently working with oilfield customers on dual fuel engine conversions and dedicated natural gas engines for drilling and pressure pumping throughout Texas," the spokespersons said.

Stabilis and Flint announced the formation of their JV a year ago, previewing the possibility of building up to five LNG liquefiers serving oilfield fuel consumers (see Shale Daily, Oct. 4, 2013). In addition to Texas, joint venture officials said they are eyeing possible development sites in North Dakota and other U.S. oilfield markets, all of which could start production in a two-year window of 2016-2018.

Officials from both companies touted the proposed second plant for its timing and location. Stabilis CEO Casey Crenshaw said his company is focused on the needs of oilfield engine operators and the West Texas facility will complement its existing operations.

"Oilfield operators require a high level of service from their suppliers," Crenshaw said, noting that the joint venture partners are striving to be the "leading turn-key supplier of LNG to the oilfield market."

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