Barnett Shale

It didn’t take long before Craig Dickman heard something interesting about natural gas in the transportation business here at the CeraWeek energy conference, which kicked off Monday. Dickman’s company, Breakthrough Fuel, helps companies set up fleets for natural gas and other alternative fuels. What got his attention was a description of the Chinese trucking market by Xizhou Zhou, director of China Energy for IHS, the sponsor of CeraWeek. Just four or five years ago, Zhou told his audience of energy executives from around the world, China had virtually zero heavy-duty trucks running on natural gas. Now, he said, there are perhaps as many as 70,000 big rigs running on natural gas, but liquefied natural gas, not the compressed natural gas more commonly used in the United States by operators like the city buses operated by The T, Fort Worth’s local transit operation.

LNG is so much cheaper in China than diesel, Zhou said, that truckers can recover the added cost of using the fuel in less than a year. The transition is aided by between 300 and 400 LNG fueling stations built to supply those trucks. “I think people here will be underestimating, not overestimating, gas in transportation,” Dickman said. Use in the long-haul market has been limited by the lack of a large engine those vehicles use, he said, but a 12-liter version from Cummins expected by August and being adopted by manufacturers should be a big boost. PACCAR, which produces Peterbilt and Kenworth brand trucks at its Denton plant, announced last year that it would use the engine.

For more, see Tuesday's Star-Telegram, and follow Jim Fuquay's continuing coverage of CeraWeek.

 

Swiss firm moves to ship Marcellus ethane overseas

Ineos Group AG, a Swiss chemicals manufacturer, has contracted with a Danish shipbuilder to transport ethane from a Philadelphia-area terminal to its petrochemicals plant in Norway. The deal impacts Fort Worth-based Range Resources, which last year agreed to supply ethane, a component of natural gas, to Ineos from a facility in Marcus Hook, Penn., starting in 2015. Range is one of the largest producers in the Marcellus Shale, a fast-growing field in the Appalachians. Range last year committed to be the anchor shipper of natural gas liquids on the Mariner East Project, running from southwestern Pennsylvania to Marcus Hook. on Wednesday, Ineos said it will buy an undisclosed number of liquefied natural gas (LNG) tankers from Evergas of Copenhagen, Denmark, to transport the ethane to an Ineos facility in Rafnes, Norway. Ethane can be processed into ethylene, a basic feedstock in the production of plastics.

-- Jim Fuquay

 

Cheniere signs deal with Total for LNG exports

Houston-based Cheniere Energy said today its Sabine Pass Liquefaction subsidiary agreed to sell liquefied natural gas equivalent to about 91.25 billion cubic feet a year to Total Gas and Power North America. It said today it will also sell another 13.5 bcf equivalent on a seasonal basis from the Gulf Coast facility being built. Those volumes are equal to about 2 million metric tonnes of LNG a year. (A tonne, or 1,000 kilograms, is about 2,200 pounds, or 1.1 tons U.S.). Each of five planned "trains," or LNG processing lines, is expected to have a capacity of 4.5 million tonnes a year. Two trains are under construction, Cheniere said, and two more will begin construction in 2013. The deal runs for 20 years once Cheniere brings the fifth train online, and can be extended another 10 years, the company said. "Deliveries from train five are expected to occur as early as 2018," Cheniere said. Total, a French energy firm, has invested in U.S. shale gas assets, including $2.25 billion nearly two years ago for a 25 percent stake in Chesapeake Energy's Barnett Shale production.

The company's news release is here.

-- Jim Fuquay