Encana Corporation (Encana) (NYSE: ECA), a leading North American natural gas producer, and Ferus LNG Inc., a North American leader in liquefied natural gas (LNG) fueling solutions, today announced plans to build a 190,000 litre per day LNG production facility near Grande Prairie, Alberta.
The facility is strategically located in close proximity to high levels of energy industry activity in northwestern Alberta and northeastern British Columbia. It is expected to be operational by the end of 2013 and will be among the first in Canada designed to produce high-quality LNG fuel specifically for high-horsepower (HHP) engines used in drilling rigs, pressure pumping services, and heavy-duty highway and off-road trucks. Other HHP applications for this LNG supply include rail, mining, and remote power generation. To support the entire LNG supply chain, Encana and Ferus LNG have also designed and are in the process of building specialized mobile storage and dispensing equipment.
“LNG is quickly becoming the fuel of choice for HHP engines in both highway and off-road applications in North America,” said Eric Marsh, executive vice president, Encana Corporation and senior vice president, USA Division. “This project demonstrates the increasing viability of LNG as a fuel alternative for a wide range of industries. With this new LNG plant, Encana and Ferus LNG are meeting a growing market demand by helping diesel consumers in northern and western Canada make the switch to cleaner-burning natural gas to both save costs and reduce their emissions.”
This joint venture project is unique in that it brings together two experienced and complementary parties who, in addition to enabling their business partners and customers to switch to LNG, have committed to using the fuel for their own internal consumption. In 2011 alone, Encana saved $12 million in fuel costs by using natural gas instead of diesel in drilling rigs and company trucks and is on track to exceed this figure in 2012.
“Ferus Inc. understands the economic and environmental benefits of using LNG as an alternative fuel, and as such, not only are we operating the first two LNG tractors in Alberta, we plan to convert our entire truck fleet over the next five years,” said Richard Brown, president and CEO of Ferus Inc. “We are very pleased to be working with Encana to help develop the natural gas engine market by ensuring fuel supply and operating the necessary equipment to safely and reliably get the product to our customers’ site.”