In what will be the highest volume customer for compressed natural gas in the nation, NG Advantage LLC – a Clean Energy company (NASDAQ: CLNE) - announced today that it has signed a contract to work with International Paper (NYSE: IP) to deliver compressed natural gas (CNG) to International Paper’s Ticonderoga, NY, mill. NG Advantage will deliver CNG to the mill using its "virtual pipeline," which consists of compressor stations located on natural gas pipelines, a fleet of specially designed carbon fiber CNG trailers, and off-loading and monitoring equipment which NG Advantage is installing at the mill. Deliveries will begin in May 2015. Terms of the deal were not released.
International Paper initially awarded this contract to NG Advantage in order to begin using natural gas prior to the completion of a planned natural gas pipeline. However, as previously announced, International Paper decided to cancel the pipeline project for cost reasons. Despite the cancellation of the project to deliver natural gas to the mill by constructing a pipeline under Lake Champlain via Vermont Gas Systems, International Paper has stated it still wants to reducing fuel costs while contributing to a cleaner environment.
NG Advantage will employ 14 trucks a day from its Milton station to supply the paper mill. The NG gas will replace number 6 fuel oil currently used, which is also trucked in.
The company has issued a new RFP for a long-term trucked CNG contract, starting when the current contract with NG Advantage ends. NG Advantage is a bidder for the long term contract as well.
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The mill is currently International Paper’s largest US plant without access to natural gas. In order to meet this huge demand safely and reliably, NG Advantage has invented the “Private Virtual Pipeline,” a high-volume variant of the Virtual Pipeline service, which the company introduced to the US market in March of 2013. Tractors and drivers will be based in Ticonderoga, NY – where the mill is - and gas can be provided from any of several compressor stations used by NG Advantage.
North American natural gas is expected to displace at least 32,000 gallons of fuel oil a day during this contract. The gas will be used to run the mill’s kiln and power boiler.
NG Advantage, based in Colchester, opened its first compression station in Milton and is itself Vermont Gas' largest customer.
NG Advantage’s CEO Tom Evslin said, “Because International Paper is staunchly committed to their environmental goals, they have done years of design work to extend a pipeline under Lake Champlain to replace fuel oil with natural gas. They will now be able to convert to burning natural gas even though the pipeline extension proved uneconomical. We are proud to use our equipment, technology, and experience to deliver the economic and environmental benefits of natural gas using our “Private Virtual Pipeline” to the Ticonderoga mill and to contribute to the economy of that region.”
Looking like any other semi, the trucks carry compressed (not LNG) gas and hook into the customer's plant. Multiple trucks are used to assure a constant supply.
NG Advantage was the first company to deliver compressed natural gas to industrial customers in the United States and is the US industry leader in volumes delivered. It is a US based mid/downstream company which currently trucks CNG to 22 large industrial and institutional customer sites in New England and New York State. With its majority investor, Clean Energy Fuels, NG Advantage is expanding its coverage area nationwide in 2015.
About NG Advantage LLC: NG Advantage is a US based mid/downstream provider and the leader in the new “Virtual Pipeline” industry of trucking compressed natural gas (CNG) in the US – bringing the economic and environmental benefits of North American natural gas to large institutions and industrial customers without access to a pipeline or on a pipeline without sufficient capacity. The Company’s current customers include large regional hospitals, paper mills, asphalt facilities, food processors, industrial dry cleaners, LDCs, and manufacturing facilities. As a result of the purchase of a controlling interest in the company by Clean Energy Fuels(NASDAQ: CLNE), NG Advantage is expanding its service area nationwide beginning in 2015.
About International Paper:International Paper (NYSE: IP) is a global leader in packaging and paper with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include industrial and consumer packaging along with uncoated papers and pulp. Headquartered in Memphis, Tenn., the company employs approximately 58,000 people and is strategically located in more than 24 countries serving customers worldwide. International Paper net sales for 2014 were $24 billion. For more information about International Paper, its products and stewardship efforts, visit internationalpaper.com.
Source: NG Advantage. 4.22.2015. NGadvantage.com. VERY TOP PHOTO: Tom and Mary Evslin at the Milton station. Photo by VBM