Trucking natural gas to stationary and transportation end-users beyond the reach of the North American pipeline network is growing as players eye expanding the "mobile pipeline" into new market areas.
Hexagon Composites said this week it received an $8 million order for larger-volume mobile tanks for hauling compressed natural gas (CNG) from Boston-based Xpress Natural Gas (XNG). The order represents what the tank-manufacturing subsidiary Hexagon Lincoln called a "significant expansion" for XNG, which operates earlier versions of gas-hauling tractor-trailer tanks called TITAN.
Subject to final certification from the U.S. Department of Transportation (DOT), the expanded TITAN XL tanks would provide XNG with more reliability and efficiencies, according to CEO John Nahill. Hexagon copyrighted the term “mobile pipeline products,” too.
"Our mobile pipeline products enable industries to take advantage of reduced nitrogen oxide (NOx) and particulate emissions with their communities even when they are not located near pipelines," said Hexagon’s Frank Haberli, vice president for mobile pipelines.
Already used in Latin America, the TITAN XL represents what the company claims is the world's largest volume road trailer for transporting CNG. "It's unique, ultra-light carbon fiber Type 4 cylinders allow it to meet the gross vehicle weight rating (GVWR) limitations of several U.S. states," a spokesperson said.
Hexagon expects the DOT certification soon, and the initial order by XNG carries an option to purchase another $8 million worth of tanks, the spokesperson said.
The new tanks are roughly 25% larger in volume than existing TITAN tanks, said XNG’s Matt Smith, executive vice president for sales and marketing. "Hexagon's TITAN XL has a tube configuration that allows more gas to fit inside essentially the same size tank."
XNG expects to provide better service at lower costs to customers with the larger-volume tanks, said Smith, who in 2011 co-founded the privately held provider of CNG and liquefied natural gas (LNG). XNG began in its home base of New England, and has since expanded to Virginia, North Carolina and the Pacific Northwest.
In July XNG is scheduled to begin CNG truckloads to the energy-starved Olympic Peninsula in the Washington (see Daily GPI, Sept. 8, 2015). XNG has developed a CNG terminal at Puyallup, WA, connected to Williams' Northwest Pipeline Co. system to truck CNG to an energy-intensive Port Townsend Paper Corp. paper/pulp mill that is switching from oil to natural gas.
XNG has been doing something similar in New England (see Daily GPI, Dec. 31, 2013). While operating its CNG trucking fleet, XNG plans to market its facility as a fueling depot to help expand the natural gas vehicle fleet market in the Pacific Northwest.
"We know our station will provide trucking companies with up to 50% fuel savings versus diesel," a XNG spokesperson said last year when announcing the Northwest plans.
While three gas utilities serve most of the state, the Olympic Peninsula has no gas pipelines, and XNG officials contend there are "many businesses and institutions located across the Northwest that cannot get pipeline service due to the high cost of expansion given the area's topography." Thus, XNG officials believe the CNG business could fill a void, replacing diesel and oil.
"The gas is connected [in the Northwest] and is ready to flow, and we plan to start delivering gas in July to our first customer up there, the paper company," Smith told NGI on Tuesday. He said XNG is continuing to see annual volume increases in its business of 20%-25% year/year.
"This year is actually shaping up to be better than that. We are seeing significant volume growth -- both in terms of new customers in existing markets and new markets."
Smith noted that the business is growing for providing trucked gas supplies -- as either CNG or LNG -- for utilities doing extensive pipeline safety and maintenance work that requires shutting the gas stream in parts of their service areas for periods of time to replace and repair infrastructure. The trucked gas is used as a supplement.
New York City's Consolidated Edison was a recent customer, and on the West Coast, Pacific Gas and Electric Co. has used trucked CNG and LNG in its pipeline operations (see Daily GPI, Sept. 30, 2015).
Smith said it is difficult to quantify whether the delays or cancellations of pipeline projects in the Northeast have caused an upswing in XNG's business, but he thinks that is a factor.
"The ability to get access to natural gas is probably as important to folks as it ever was," he said, adding that XNG deals with six- to nine-month sales cycles.
He did not see any concerns with the need for DOT certification on the new Hexagon tanks, adding that the tank supplier "has had a terrific track record" with its products, and "this [TITAN XL] is just an extension of an existing product line for them. Their product line has become somewhat of an industry standard."