General Electric (NYSE:GE) and Clean Energy Fuels Corp. (NASDAQ:CLNE) have reached an agreement for a natural gas project. Clean Energy will purchase two MicroLNG plants developed by GE to supply liquefied natural gas through its network of natural gas fueling stations.
'We currently have some LNG production facilities, but the country is going to need more,' said Andrew Littlefair, Chief Executive of Clean Energy, in a statement released on Tuesday. 'These two plants are critical in our next phase (of expansion) and we are going to need more plants over time.'
Clean Energy is working on a major project to install 70 natural gas stations in the U.S. at truck stops located on major highways this year. The project will extend into 2013, when the company expects to increase this to 150 filling stations in total.
Natural gas is experiencing a production boom, fed largely by fracking and unconventional production. A result has been a serious drop in prices, which has made natural gas highly attractive for vehicles compared to conventional fuels.
According to Clean Energy, trucks running on LNG get to save almost 25% of their total fuel costs. Consider, however, that the special engines they must utilize offset that gain a bit.
General Electric expects that using its own conversion plants to draw natural gas from pipelines and chill it into LNG will help meet demand much better than the current business model, where LNG is mostly produced by electric power stations during off-peak hours.