by Timothy McQuiston Vermont Business Magazine The Vermont entrepreneurs who came up with an innovative business model which trucks natural gas to industrial customers off the natural gas pipeline system have sold a controlling interest in their Milton, Vermont, firm. Clean Energy Fuels Corp (NASDAQ: CLNE) on Wednesday announced that it has acquired from Tom and Mary Evslin a controlling interest in NG Advantage LLC for $37.6 million. NG Advantage isa pioneer in the natural gas “virtual pipeline” delivery system. The natural gas is compressed (not liquefied) and specially designed trucks deliver it to the customer, where the truck then also serves as the storage facility. Clean energy said in a statement that the NG Advantage investment will primarily be used to fund capital expenditures for expansion and growth in that business. Clean Energy will also purchase NG Advantage’s Milton compression station for $9 million, which is on track to supply nearly 16 million gasoline-gallon-equivalents (GGEs) of CNG annually. This station will immediately become Clean Energy’s highest-volume station in its nationwide network of almost 500 stations.
“The NG Advantage purchase is a perfect example of Clean Energy’s focus on aggressively pursuing new market opportunities to help rapidly grow our CNG gas sales,” said Andrew J. Littlefair, President and CEO of Clean Energy, based in Newport Beach, CA. “Our record growth in overall delivered gallons combined with the new market reach of NG Advantage positions Clean Energy to keep growing as our trucking business develops.”
Littlefair added, “We immediately recognized the potential in NG Advantage as a powerful partnership combining Clean Energy’s leadership in natural gas fueling and compressor technology with NG Advantage’s market presence and pioneering delivery system. NG Advantage’s groundbreaking ‘virtual pipeline’ currently brings natural gas to new markets in the Northeast with the potential of expanding to other areas in North America that do not have direct access to natural gas pipelines.”
Littlefair co-founded Clean Energy with T Boone Pickens in 1997. Clean Energy has been primarily a natural gas filling station for fleet trucks. Those stations typically are located near major highways.
RELATED STORY: NG Advantage delivers natural gas via a ‘virtual pipeline’
FULL SEC FILING: 8-K October 15, 2014
NG Advantage’s founder and president, Tom Evslin, will remain with the company as CEO and its second largest investor, and will continue to oversee operations from its Milton offices. Founded less than four years ago, the company and the acceptance of the “virtual pipeline” have grown rapidly. As a result of this partnership, Clean Energy expects a significant increase in delivered CNG volume day one and forecasts rapid growth as NG Advantage expands with Clean Energy’s existing station network and new stations built with compressors from its IMW subsidiary.
“Rising and unpredictable fuel costs have made it exceptionally difficult for manufacturers and facilities without access to the nation’s natural gas pipeline network to compete in an increasingly competitive marketplace,” said Evslin. “NG Advantage is forging a new industry which meets this need, and the partnership with Clean Energy ensures our customers will be working with the most experienced natural gas fuel provider at every step in the process. Clean Energy had the foresight to establish the country’s largest network of compression stations. Although they were originally built for vehicle fueling, they compress gas to exactly the pressure we need to fill our trailers and we expect many will be suitable for co-location. We look forward to using this network to rapidly bring the benefits of natural gas to enterprises beyond the pipeline nationwide.”
Founded in 2011, NG Advantage has created a new industry transporting CNG in high-capacity trailers to large industrial and institutional energy users such as hospitals, food processors, manufacturers and paper mills. The CNG is transported in its fleet of tanker trucks, offloaded and used to replace fuel-oil and propane which can save customers up to 40 percent on fuel costs while reducing greenhouse gas emissions by up to 26 percent. Companies burning coal can reduce their CO2 emissions by 50 percent when converting to natural gas.
Ribbon cutting at the Pembroke, NH station. Courtesy photo.
NG Advantage has exclusive long-term contracts with more than 20 energy-intensive organizations served by its Milton compression facility and the newly-opened Pembroke, NH, facility. The Pembroke facility utilizes six IMW compressors which can fill approximately 3,500 CNG gallons per hour. The facility is owned and operated by Clean Energy.
Mary Evslin said: "This investment will fund expansion probably first east of the Mississippi. We are doing the market research now to decide where to locate the stations. One of the exciting things about this relationship is that Clean Energy already has 500 stations across the country. An option is for us to find large customers and then increase the capacity in one of their existing stations, if there is one in the area, to serve customers faster. And if we find a lot of companies in need of CNG and there is no Clean Energy station in the area, one of us will build a station and the other can use."
She also said that depending on the level of expansion, NG Advantage will hire within Vermont and at the other locations as they come on line. NG has 26 on its payroll now and its contract hauler, JP Noonan, has hired another 20-plus HAZMAT certified drivers to serve NG accounts.
Clean Energy has also announced that it delivered for the first time over 50 million compressed natural gas (CNG) gallons in one quarter (Q3 2014) with the delivery of 50.6 million CNG gallons.
Source: NEWPORT BEACH, Calif.– October 15, 2014 – Clean Energy Fuels Corp. NG Advantage LLC: VERY TOP PHOTO: Tom and Mary Evslin at the Milton filling station in August. VBM file photo.