Natural gas as a transportation fuel has zoomed around the map of North America in August, capitalizing on a continuing price advantage at the pump even with recent falling gasoline prices. Separately, last Thursday, a major U.S. provider of gas transportation fuel and fueling infrastructure received a $150 million investment from three global private investment firms.
The first stop on August’s gas highway tour was Baytown, TX, near Houston where the first facility of what is billed as a 150-station natural gas highway was opened as part of a major partnership between Pilot Flying J Travel Centers and California-based Clean Energy Fuels Corp., the builder, operator and fuel supplier for the new liquefied natural gas (LNG) dispensing station, and the recipient of the global investment windfall.
Touting the new investors as an indication of a “growing” natural gas vehicle (NGV) market in the United States, Clean Energy identified its newest backers as two Singapore-based firms — Springleaf Investments Pte Ltd., a subsidiary of Temasek Holdings Pte Ltd.; and Lionfish Investments Pte Ltd., an investment vehicle managed by Seatown Holdings International Pte Ltd. — and UK-based Greenwich Asset Holding Ltd., a subsidiary of RRJ Capital Master Fund I LP.
In Baytown, the station holds a 15,000-gallon LNG tank storage capacity and opened with a single dispenser, but Clean Energy said the station has the capacity to expand with additional storage tanks and dispensers. For now, Trimac Transportation will be a major customer with its fleet of 14 Kenworth LNG trucks getting all of its fuel and service needs taken care of there. Trimac bought its LNG fleet with funding help from the Houston-Galveston Association of Governments.
Clean Energy called this station the “first operating node” of what eventually will be “America’s natural gas highway,” which will provide the backbone of what the Seal Beach, CA-based firm envisions as a critical national network with natural gas fueling stations located all along major interstate highway trucking corridors.
As was promoted in Idaho recently, natural gas — either LNG or compressed natural gas (CNG) — is a good deal at the pump, and that continues to contribute to the new found interest in the transportation value of natural gas. After being available for commercial fleets for several years in parts of Idaho, earlier this month the first public access for CNG vehicles was opened in the Treasure Valley area of the state. Local media touted the equivalent of $1.60/gal gasoline as the price for CNG (vs. $3.60/gal for actual gasoline).
Clean Energy, which also operates the Idaho station, targets large fleets with big gasoline bills because they have the best chance to more quickly recoup the higher vehicle costs from the fuel savings.
Elsewhere, Clean Energy opened another CNG station in New Jersey in conjunction with Covanta Energy Corp. The two have a contract with the Port Authority of New York and New Jersey to build and operate a CNG fueling station at the Essex County Resource Recovery Facility in Newark, NJ. Built on a Covanta site, it will serve public and private municipal waste haulers as they convert their fleets from diesel to CNG.
More recently, a summit on the transportation use of propane in Alaska was held Tuesday at which Michigan-based ROUSH CleanTech promoted its propane fueling system for vehicles as a means of stimulating job growth and environmental sustainability in the far north state. ROUSH used the summit to report on nine months of testing two propane-fueled Ford F-250 pickup trucks during the past nine months.
Clean Energy said the $150 million in new investment is in the form of 7.50% convertible notes due in 2016, with the notes convertible into Clean Energy Fuels stock at $15/share. Closing is expected by Tuesday (Aug. 30).
The latest investment in Clean Energy, which was founded by oil/gas billionaire T. Boone Pickens, comes on the heels of shale gas pioneer Chesapeake Energy Corp. and its CEO Aubrey McClendon ponying up $150 million for the natural gas fuel firm as part of a $1 billion initiative to displace gasoline in transportation (see NGI, July 18).
“We are pleased to have introduced Clean Energy to our friends at Temasek, Seatown and RRJ,” said McClendon, characterizing the latest investment by the three global investors as “beneficial to increasing the demand for natural gas in North America and also to keeping Clean Energy in the lead for providing natural gas vehicle fueling and deployment solutions in North America.”
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