Pennsylvania midstream operator UGI Energy Services Inc. on Wednesday launched plans to replace the diesel now powering its Marcellus Shale drilling fleet with liquefied natural gas (LNG). UGI’s plan mirrors a pilot initiated by EQT Corp. earlier this month to convert its Marcellus diesel rigs (see Shale Daily, July 6).

LNG would be used “throughout the Marcellus region” for the UGI Corp. subsidiary’s truck fleets and industrial facilities as an alternative to diesel and other petroleum products, said UGI Energy Vice President for Business Development Matthew Dutzman.

“With natural gas prices expected to be low relative to oil for the foreseeable future, cleaner burning LNG is a highly economical alternative for more remote oil-burning industrial facilities that do not have access to piped natural gas and for truck fleets that use large quantities of diesel fuel,” Dutzman said. “Fleets with large tractor trailers, such as Class 8 [vehicles], consider LNG a very attractive alternative fuel to diesel given its low cost and inherent environmental qualities, as well as an attractive option to compressed natural gas given LNG’s superior driving range.”

Subsidiary UGI LNG Inc. operates the Temple LNG storage facility in south-central Pennsylvania near Reading, which is certified by the Federal Energy Regulatory Commission, Dutzman noted. The facility, which has 1.25 Bcf of storage capacity available, is capable of delivering up to 200 MMcf/d.

“As a contract capacity holder in the Temple Facility, UGI Energy Services believes that it can provide the most economic source of LNG available to serve growing markets for alternative natural gas-based fuels given the proximity of the Temple Facility to dense population areas, rural industrial companies and the prolific gas-producing Marcellus and Utica shale regions of Pennsylvania, New York, Ohio and West Virginia.”