Clean Energy Fuels Corp. has agreed to buy General Electric technology that liquefies natural gas to supply filling stations for long haul trucks along major U.S. transportation corridors.
Clean Energy Fuels will also borrow up to $200 million from GE to buy to buy two of the systems, the companies said in a press release Tuesday. Each system will produce 250,000 gallons of LNG per day — enough to fuel 28,000 trucks, GE says.
The system can be expanded to produce 1 million gallons per day. The LNG will be sold mostly at Pilot-Flying J truck stops. The systems are expected to begin operation in 2015, but the locations for the systems have not been determined.
Shares of Clean Energy Fuels rose $1.12, or 10.1 percent to $12.18 per share in morning trading.
Passenger cars, sanitation trucks and local delivery trucks can use compressed natural gas as a fuel, but long-haul trucks use so much fuel that they must carry the much more compact liquefied natural gas.
Liquefying natural gas often requires a sprawling amount of equipment to lower the gas's temperature to -260 degrees Fahrenheit. General Electric, based in Fairfield, Conn. has developed a small, modular system the company calls "Micro-LNG."
Clean Energy Fuels, based in Seal Beach, Calif., builds natural gas fueling stations. Many are for private groups that operate fleets of natural gas vehicles, such as delivery companies, utilities, or municipalities that operate buses and sanitation trucks. The company is also trying to build a network of public fueling stations to service long-haul trucks so trucking companies can switch to natural gas vehicles.
A drilling boom in natural gas has pushed its price down compared with the price of oil-based fuels such as diesel. There appears to be so much domestic natural gas that trucking companies and engine makers are becoming confident that the natural gas price advantage will last long enough to allow them to more than recoup the higher cost of the natural gas-powered engine and storage tank.
GE estimates switching to natural gas will cut fuel costs for long-haul trucks by 25 percent.
Still, engine makers are only now unveiling large-sized natural gas engines, and a nationwide fueling network is still years away. Clean Energy Fuels plans to have 70 LNG stations by the end of the year.