Washington (Platts)--13Nov2012/332 pm EST/2032 GMT

Clean Energy Fuels announced Tuesday it will spend more than $200 million to buy two hi-tech liquefied natural gas plants from General Electric as part of its plans to expand LNG fueling station service in the US.

Clean Energy CEO Andrew Littlefair said his company is buying two Micro LNG plants from GE Oil & Gas for about $115 million each. The plants will have an initial capacity to produce 250,000 gallons of LNG/day, expandable to 1 million gal/d. GE Energy Financial Services is providing up to $200 million in financing for the plants.

The plant locations have not been determined but Littlefair said they will likely be in the Upper Midwest and Northeast. Most of the LNG the plants produce will be sold from Pilot-Flying J truck stops, he said.

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Littlefair and Mike Hosford, general manager of unconventional resources for GE Oil and Gas, said the companies hope to select two plant sites in 2013 and have them operational in 2015.

GE also is providing turnkey process/plant construction and consultation on optimal plant locations and power partners, Hosford said. The scope of the agreement also includes project installation and the complete process design, from pretreatment of the gas to storage.

Littlefair said Clean Energy wants to have 70 LNG fueling stations operational by the end of 2012, with more planned for next year to serve the movement of goods along major transportation corridors throughout the US. Clean Energy buys LNG from third parties to serve these stations, he said.

Littlefair said the timing of this partnership "couldn't be better" because in 2013 four major manufacturers will introduce the Cummins Westport 12-liter LNG engine, the optimum size for long-haul Class 8 trucks.

Littlefair said GE partnering with Clean Energy on these two facilities "will not only help ensure an adequate LNG supply for our stations, but it is another confirmation that the transition to natural gas as a transportation fuel is gaining momentum."

The LNG systems Clean Energy is buying have a 67% increase over the Micro LNG plants GE introduced in January, GE said. They will be the first of their kind in the US, although GE has built smaller Micro LNG plants in Russia, a company spokesman said.

GE said the LNG produced by the Micro LNG system will help reduce a fleet operator's fuel costs by more than 25% compared with diesel fuel.

--Rodney White, rodney_white@platts.com
--Edited by Jason Lindquist, jason_lindquist@platts.com

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