Chart Industries Inc. has recently seen growing interest in technology and equipment related to small-scale liquefied natural gas (LNG) developments since the start of the year, but it expects large-scale activity to be muted this year.
“From the beginning of the year until now, our small-scale pipeline has easily grown $150 million from a quoting pipeline potential,” CEO Jill Evanko said during a 1Q2021 earnings call Thursday.
Chart is less optimistic for large-scale LNG facilities, but noted in its earnings report that at least one order could be placed this year.
“We are no longer relying on one or two big projects happening,” Evanko said.
Chart has orders pending at two proposed Louisiana facilities, Venture Global LNG Inc.’s Plaquemines export site and Tellurian Inc.’s Driftwood facility. It also has an order for Cheniere Energy Inc.’s Corpus Christi Stage 3 project in South Texas. Combined, the orders represent more than $750 million, Evanko said.
In its earnings report, Chart said it expects small-scale LNG to grow in the United States and abroad, “in locations where the first step in the energy transition is to move from coal to another, cost effective and readily available power source such as carbon-neutral LNG.”
On the call, Evanko said innovations like New Fortress Energy Inc.’s Fast LNG concept, which are designed to be built and deployed quickly, are helping to bolster the sector.
“I think the more you see the Fast LNGs go in this most creative side of LNG, I think that number is going to exponentially grow this year,” she said. “I mean, it’s amazing how many customer conversations we’re having on the small-scale side for LNG.”
The company also has a letter of intent to supply technology and equipment for an undisclosed project in the Northeast. The award, which Evanko said was valued at more than $20 million, could be sanctioned in the coming weeks.
Chart also said it booked record orders for equipment and technology related to hydrogen, logging $71.2 million in hydrogen orders during the quarter. By contrast, it booked $4.2 million in hydrogen orders in the same period one year ago.
Chart recently completed the takeover of hydrogen liquefaction specialist Cryogenic Gas Technologies Inc. It also recently invested in the FiveT Hydrogen Fund and in Transform Materials.
CEO Jill Evanko said the orders included storage tanks, fueling station equipment and transport.
“It’s interesting, because it’s a pretty broad set of types of applications that it’s going to be used as a power source,” Evanko said during the earnings call.
Evanko noted a “pragmatism” from customers toward the different “colors” of hydrogen. Many are opting for so-called “blue” hydrogen, which is produced using natural gas, because it is faster to build out than the “green” variety, which is produced without fossil fuels.
“Some of them are doing green now, but others are saying, ‘Let me get liquefaction started,’” she said. “And in the case of our technology, we can handle any color.”
To demonstrate the rapid growth the company has seen in the sector, Chart is in talks with 214 hydrogen customers and potential customers, compared to about 30 one year ago, she said.
Net earnings were $25.6 million (63 cents/share) in 1Q2021, compared with $8.5 million (24 cents) in the year-ago period.
The company raised its full-year 2021 sales guidance to $1.36-1.41 billion from a previous forecast of $1.32-1.38 billion. The outlook boost is the result of its “strong first-quarter order book,” the company said, including the hydrogen and Fast LNG orders.
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