A mainstay in the natural gas vehicle (NGV) fueling sector, Clean Energy Fuels Corp. said Thursday in its third quarter earnings report that it is closing 42 of its nearly 600 fueling stations, slashing support and seeking a partner for the compression equipment supplier.
The Newport Beach, CA-based firm said the moves were strategic, and management downplayed the loss of the stations, noting that the gas transportation volumes will be made up by the existing network of newer, larger stations.
The facilities being closed are close to 10 years old and were built by utilities to service light-duty vehicles before Clean Energy acquired them, management said. There are 533 newer, larger stations in the network.
"We believe these actions will enhance our competitive position and result in improved financial performance in 2018," said CEO Andrew Littlefair.
Shuttering the unprofitable stations will save $3-4 million, and on the sales/administrative side, costs have been reduced by $15 million.
"We're confident that with a small, yet motivated sales team strategically located around the country we'll continue to capture a large share of the alternative fuels market," he said, singling out the refuse hauling, transit and trucking markets.
The compression business is fighting an uphill battle against cheap oil, Littlefair acknowledged. However, even with a partner, “we should continue to have a healthy share of the North American market.”
Third quarter revenues fell year/year, which the company attributed to selling renewable natural gas (RNG) production from the Redeem brand to BP plc for $155 million.
"We remain very positive about the RNG business as the sale to BP allows us to more aggressively sell our fuel," Littlefair said.
He also touted prospects for near-zero emission large NGV truck engines and using RNG in the coming years at the Long Beach/Los Angeles ports in Southern California. On Thursday, the ports’ governing boards jointly agreed to a program to phase out the use of diesel in favor of first, natural gas, and eventually electricity.
"We've been working very closely with the port staffs and all of the people involved in the truck portion of the program, such as the trucking associations, for the past nine months or longer," he said.
Clean Energy reported a net quarterly loss of $94.1 million (minus 62 cents/share), versus a year-ago loss of $12.6 million (minus 10 cents).