USA: UGI Energy to Provide LNG for Marcellus Shale Drilling Rigs

UGI Energy Services, Inc. today announced that it will provide liquefied natural gas (LNG) to fuel drilling rigs active in the Marcellus Shale region. The LNG will displace diesel currently used to fuel power generation equipment at the rig site.

“UGI Energy Services is pleased to supply LNG as a fuel for drilling operations; and we are also proud to partner with EQT Corporation which recently launched a pilot program to begin converting drilling rigs from diesel to LNG,” said Matthew Dutzman, Vice President of Business Development. “LNG is significantly lower in cost and reduces emissions compared to diesel fuel; and we look forward to providing LNG for drilling operations throughout the Marcellus region.”

UGI Energy Services also intends to provide LNG to truck fleets and industrial facilities as an alternative to diesel and other petroleum products. According to 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.” Fleets with large tractor trailers (e.g., Class 8) consider LNG a very attractive alternative fuel to diesel given its low cost and inherent environmental qualities, as well as an attractive option to CNG given LNG’s superior driving range.

UGI LNG, Inc., a subsidiary of UGI Energy Services, Inc., operates a FERC certificated LNG storage facility near Reading, Berks County, Pennsylvania (the Temple Facility). UGI LNG has the capability to both liquefy natural gas and store over 15 million gallons of LNG at the Temple Facility. 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.

According to Louis James, Director of Business Development for UGI Energy Services, “UGI Energy Services provides LNG customers with a full range of services including: project conception and system design, construction management, risk management (gas price hedging), LNG transportation options, and operation and maintenance of the on-site customer system.”

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LNG World News Staff, July 12, 2012