Stabilis Energy Buys Domestic LNG Business from Encana
- Project & Tenders
Stabilis Energy signed a definitive agreement to purchase substantially all of the U.S. based assets of Encana Natural Gas (ENGI). Denver-based ENGI is a leading distributor of LNG fuel to domestic high horsepower engine operators in the oilfield, mining, rail, marine, over the road transportation, and industrial sectors.
ENGI is a subsidiary of Encana Corporation. The transaction is scheduled to close on April 30, 2014.
Casey Crenshaw, President and CEO of Stabilis Energy said:“ENGI has a world-class staff that will help us reach our goal of being the leading provider of LNG fuel solutions to high horsepower operators in North America. They possess deep sector expertise and strong customer relationships that we believe will make Stabilis Energy an LNG industry leader across multiple geographies and end markets.”
In addition to adding ENGI’s staff, Stabilis has agreed to purchase its fleet of cryogenic rolling stock assets including storage and regasification trailers, mobile fueling units, and other related equipment. Stabilis will fulfill all of ENGI’s existing customer obligations including its existing contracts, subject to customer consent. Crenshaw stated, “Stabilis is excited about growing the LNG market in partnership with ENGI’s market leading customers.”
“Encana Natural Gas Inc.’s customers should expect business as usual – with the same great people, great equipment, and great customer service,” said Jim Reddinger, Chief Operating Officer of Stabilis Energy. “But they also will benefit from the expanded scope and scale of the new Stabilis Energy business. Our fully integrated LNG fuel solutions offering – spanning from LNG production to delivery and on-site technical service — will give our customers the confidence they need to choose LNG to fuel their mission critical high horsepower engine activities.”
Stabilis plans to open its first LNG production facility in George West, TX in January 2015 to service oilfield customers in the Eagle Ford shale. The facility is being built as part of a previously announced venture with Flint Hills Resources LLC, a leading refining, chemical and biofuels company and a subsidiary of Koch Industries, to build up to five LNG production facilities that target oilfield customers. The George West facility is under construction now and will be able to produce approximately 100,000 LNG gallons per day when complete. Other targeted LNG liquefaction plant locations include West Texas, North Dakota, and other major oilfield regions. Stabilis also will continue to source fuel from ENGI’s large existing third-party supply network.
“Encana is pleased that Stabilis Energy will carry on the outstanding LNG business that our Natural Gas team has worked hard to build over the past several years,” said David Hill, Executive Vice-President of Encana Corporation. “Encana believes that natural gas has a bright future as a domestic fuel source for high horsepower engines and that LNG will be an important part of this value chain.” Encana will remain a customer of Stabilis Energy for LNG.
After the transaction closes, Stabilis Energy will operate one of the largest cryogenic rolling stock fleets in North America across 20 states and multiple end markets, including oilfield, mining, rail, marine, and general industrial. Senior management teams from both organizations will assume leadership positions with Stabilis Energy.