Clean Energy, GE consortium to build first multiuse LNG facility on East Coast

Clean Energy Fuels Corp., the nation's leading provider of natural gas fuel for transportation, said today it plans to build a liquefied natural gas (LNG) fueling facility in Jacksonville, Fla., that would be the first East Coast location supplying LNG to the trucking, railroad, and maritime industries.

Located on the St. Johns River, the facility is capable of producing 300,000 gallons of LNG per day, Clean Energy said. The Seal Beach, Calif.-based company has built an LNG facility in California that can produce 180,000 gallons of LNG per day and a facility in Willis, Texas, in the eastern part of the state, that can produce 100,000 gallons of LNG per day.

Construction is scheduled to begin in the second quarter of 2014 and is set for completion in the fourth quarter of 2015. Financial details were not disclosed. The planned facility is the first project to be developed by Eagle LNG Partners, a group composed of Clean Energy, GE Ventures, GE Energy Financial Services, and Ferus Natural Gas Fuels, Clean Energy said in a statement.

Jacksonville emerged as the leading venue after ship lines based there began placing orders for LNG-fueled ships to serve Caribbean markets, Clean Energy said. Interest in LNG has increased as the shipping industry prepares for the 2015 enforcement of international laws limiting sulfur emissions and banning the use of bunker fuel within 200 miles of the United States.

Clean Energy said it is conducting an "open season" for companies to secure a portion of the facility's remaining available capacity.

Natural gas use in truck transport is gaining traction as the abundance of supply drives down prices relative to the cost of traditional diesel fuel. In addition, natural gas emits virtually no harmful pollutants and is produced almost entirely in North America. According to data posted in late September on Clean Energy's web site, LNG's average pump price at the company's public-access refueling stations was $2.87 per diesel gallon equivalent. Compressed natural gas, or CNG, another form of natural gas, was $2.94 per diesel gallon equivalent. Diesel, by contrast, was priced at just below $3.95 a gallon.

The main obstacles to increased natural gas use are the cost of the trucks, the ongoing maintenance of the vehicles, and uncertainty over the shape of the nation's refueling infrastructure. Clean Energy last week took steps to resolve the issue of higher-priced trucks when it announced it would allow fleets to lease new natural gas vehicles through GE for roughly the same price as diesel-powered trucks if they agreed to a fuel contract. A natural gas vehicle costs about $55,000 more per unit than a diesel-powered truck due to the high cost of storage tanks mounted on the trucks.

Founded by oil baron T. Boone Pickens, Clean Energy has a network of 400 refueling stations across North America. It operates in the LNG and CNG categories.