GE (NYSE: GE) and Clean Energy Fuels (Nasdaq: CLNE) are collaborating to expand the infrastructure for natural gas transportation in the United States.
The agreement supports Clean Energy’s development of “America’s Natural Gas Highway,” a fueling network that will let trucks operate on liquefied natural gas (LNG) coast to coast and border to border. Truck fleets often can reduce fuel costs by more than 25% and lower emissions with LNG.
As part of the collaboration, Clean Energy Fuels will initially purchase two ecomagination-qualified MicroLNG plants from GE Oil & Gas. The plug-and-play modular units, designed to rapidly liquefy natural gas while minimizing a site’s physical footprint, will support fueling stations along critical transportation corridors that run across the United States. Further underscoring GE’s commitment to expanding natural gas transportation infrastructure, GE Energy Financial Services is providing up to $200 million in financing for the two GE MicroLNG plants.
Clean Energy expects to complete approximately 70 LNG stations by the end of 2012, with more planned for 2013 to serve the movement of goods along major national transportation corridors. While CNG, or compressed natural gas, is primarily used in cars, buses, and smaller trucks, the LNG fueling being rolled out at Clean Energy’s stations is targeted at long-haul, heavy-duty trucks, which will have the advantage of longer driving ranges while not impacting tractor weight and incremental costs. In 2013, four major manufacturers will introduce the Cummins Westport 12-liter LNG engine, which is the optimum size for long-haul Class 8 trucks.
Clean Energy plans to use a standardized design of the new GE MicroLNG plants to build additional MicroLNG plants. These first two MicroLNG plants will produce up to 250,000 gallons per day. The plant is designed to be expanded up to one million gallons per day as adoption and demand increases. The LNG produced by the MicroLNG plants will be used primarily at Pilot-Flying J truck stops that serve truckers across the nation. The two GE MicroLNG plants are targeted to begin operation in 2015. The two companies are assessing the best locations for these first two LNG plants.
GE’s MicroLNG plant can liquefy natural gas at any point along a gas distribution network, making it ideal for supporting the fueling of vehicles in remote locations by reducing the impact of long-distance fuel transport.
The new GE MicroLNG system that will be used by Clean Energy will produce 250,000 gallons of LNG per day, or about 54 million DGEs (diesel gallon equivalents) per year with the built-in capability for further expansion. This is a 67% increase over the capacity of the breakthrough MicroLNG plant that GE Oil & Gas first introduced in January 2012. The new system will help reduce a fleet operator’s fuel costs by more than 25% versus diesel fuel. LNG produced with this MicroLNG system can be used to fuel approximately 28,000 heavy trucks. This could enable fleet operators to avoid more than 139,000 metric tons of CO2 emissions per year.