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UGI to build second LNG plant
LNG World News ^ | May 15, 2015 | LNG WN

Posted on 05/20/2015 6:32:26 AM PDT by thackney

UGI Energy Services, a UGI Corporation unit, said it plans to build a liquefied natural gas production facility in northern Pennsylvania that will utilize Marcellus Shale gas.

The proposed facility will be adjacent to UGI Energy Services’ Manning natural gas compression station located in Wyoming County, Pennsylvania. Natural gas will be supplied by its Auburn gathering system, which transports Marcellus Shale gas produced from local wells to major interstate pipelines serving markets in the Mid-Atlantic region, the company said in a statement.

The LNG plant, which will include both liquefaction and local storage, is expected to be in full commercial operation by early 2017 and have the capability of producing 120,000 gallons (or 10,000 Dekatherms) of LNG per day. The total capital investment will be approximately $60 million.

UGI Energy Services, recently expanded its existing Temple LNG plant located near Reading, Pennsylvania to produce up to 120,000 gallons of LNG per day.

The proposed new facility in Wyoming County will double UGI’s liquefaction capability and increase its LNG supply diversity.


TOPICS: News/Current Events; US: Pennsylvania
KEYWORDS: energy; lng; marcellus; naturalgas
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1 posted on 05/20/2015 6:32:26 AM PDT by thackney
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To: thackney

http://www.businesswire.com/news/home/20150514006271/en/UGI-Energy-Services-build-LNG-plant-heart#.VVyNcvlVhBd

UGI Energy Services, through its wholly owned subsidiary UGI LNG, Inc., currently owns and operates the Temple LNG facility located near Reading, Pennsylvania. This facility includes 15 million gallons of LNG storage capacity and a liquefaction plant that has been recently expanded to produce up to 120,000 gallons of LNG per day. The proposed new facility in Wyoming County will effectively double UGI’s liquefaction capability and increase its LNG supply diversity. “Our existing LNG plant at Temple has been a highly reliable and valuable asset enabling us to provide critical natural gas supply during periods of extreme natural gas demand, as well as provide firm LNG supply to large truck fleets, such as UPS,” said John Walsh, President and CEO of UGI. “The new plant will allow us to expand the availability of LNG to serve growing natural gas utility peak shaving demands and emerging LNG markets.”

Brad Hall, President of UGI Energy Services, commented, “The market for liquefied natural gas continues to grow thanks to its affordable cost and environmental benefits when compared to other petroleum products. As a result, truck fleets, oil and gas drilling rigs and remote industrial users not tied to the natural gas grid continue to switch to LNG. In the coming years, we also expect the use of LNG to increase in marine, rail, and mining applications.”

Mr. Hall added, “We have managed our investment risk by expanding LNG capacity in stages in order to keep pace with the growing LNG market. Each stage is backed by a significant level of long-term commitments from current and new customers, while still allowing for future growth. In addition to its long history of operating LNG assets, UGI Energy Services has one of the largest fleets of peak shaving assets in the region and one of the largest retail natural gas marketing businesses, providing it with a uniquely strong position to serve the market.”


2 posted on 05/20/2015 6:33:39 AM PDT by thackney (life is fragile, handle with prayer)
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http://thetimes-tribune.com/news/business/ugi-proposes-lng-plant-in-wyoming-county-1.1882344

The plant could supply a variety of industries, spokesman Matt Dutzman said. Natural gas peaker plants, smaller generating stations only run during high demand periods, are one target market.

Others include oil and gas drilling rigs, truck fleets and remote industrial users not well connected to pipeline grids.

Displacing diesel

“It’s using local Pennsylvania gas,” Mr. Dutzman said. “The LNG that we’re going to be producing is going to be used largely to displace diesel fuel.”

Nationally, LNG prices are highly competitive with diesel, said Tom Kloza, Oil Price Information Service’s global head of energy analysis, in an email on Friday.

LNG has been priced at a fraction of diesel prices for the last four years.

But that difference was more substantial from 2010 to 2014, when oil was above $100 per barrel. “I believe prices of $40 to $75 a barrel are more likely for the next few years, but one never knows,”Mr. Kloza said.


3 posted on 05/20/2015 6:34:58 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney
120,000 gallons... of LNG per day. The total capital investment will be approximately $60 million.

At $1/gal, and 120,000 gal/day, it will take 16 months to recover the $60 million.

(I have no clue what the profit margin is on a gallon of LNG, just having fun with numbers. At 120,000 per day, I would have assumed much less time to hit $60 mil. It's a million every 8.33 days... but 60 of those still takes 16 months!)

4 posted on 05/20/2015 6:49:51 AM PDT by Teacher317 (We have now sunk to a depth at which restatement of the obvious is the first duty of intelligent men)
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To: thackney
Used to be that it took half of the energy to compress and liquify natural gas. New equipment is much more efficient and make liquid natural gas feasible.
5 posted on 05/20/2015 6:53:33 AM PDT by mountainlion (Live well for those that did not make it back.)
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To: mountainlion
Used to be that it took half of the energy to compress and liquify natural gas.

LNG is not made by compressing natural gas. The critical temperature for methane is too low. It must be cooled to -260°F.

I don't ever remember a process that took half the energy. However, it is a significant amount. Typical LNG plants burn about 10-12% of the feed to drive the process.

6 posted on 05/20/2015 6:56:52 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

LNG is the “new fuel” that will power industry and road transportation well into the 22nd Century. Compact, clean-burning, and one of the most easily extracted of “fossil fuels” (as natural gas), it is a matter of developing the specialized technology to handle the product quickly and safely.

The energy component required to cool and liquify natural gas could be recovered by using waste heat from the burn process to volatilize the LNG, resulting in less waste heat getting out into the environment, a sort of regeneration effect.

Good engineering practice, in fact, should be directed at reclaiming the maximum amount of heat from any industrial process, and putting it to effective use.

Now if a fuel cell that could use methane completely in its process could be developed, that would solve SO many problems.

Get busy, engineers.


7 posted on 05/20/2015 6:59:49 AM PDT by alloysteel ("Before I refuse to take your questions, I have an opening statement..." Ronald Reagan)
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To: alloysteel
The energy component required to cool and liquify natural gas could be recovered by using waste heat from the burn process to volatilize the LNG, resulting in less waste heat getting out into the environment, a sort of regeneration effect.

Many of the major users of Natural Gas, like commercial power plants, already recover the heat in combined cycle processes. That is why modern combined cycle power turbines are reaching 60% efficiencies.

LNG liquefaction units don't burn Natural Gas, they run refrigeration compressors for most of the energy requirements.

8 posted on 05/20/2015 7:04:25 AM PDT by thackney (life is fragile, handle with prayer)
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To: alloysteel
if a fuel cell that could use methane completely in its process

Already done, provided the fuel is pure enough. Using LNG increases the purity to a level sufficient for this use.

http://evworld.com/article.cfm?storyid=1756

http://www.technologyreview.com/news/518516/an-inexpensive-fuel-cell-generator/

http://spectrum.ieee.org/energywise/green-tech/fuel-cells/ge-claims-fuel-cell-breakthrough-starts-pilot-production

9 posted on 05/20/2015 7:08:16 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney
I took a “Power and Energy” course decades ago and liquified gas was part of the coursework. It seems that it took something like 3,500 PSI to to liquify natural gas. It was quite expensive compared to propane which may have been the point of the exercise. That was 35-40 years ago.
10 posted on 05/20/2015 7:11:21 AM PDT by mountainlion (Live well for those that did not make it back.)
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To: mountainlion
I took a “Power and Energy” course decades ago and liquified gas was part of the coursework. It seems that it took something like 3,500 PSI to to liquify natural gas.

You remember it incorrectly. No amount of pressure at atmospheric temperatures will liquefy methane. The critical temperature -116.7°F.

http://encyclopedia.airliquide.com/Encyclopedia.asp?GasID=41#VaporPressureGraph


11 posted on 05/20/2015 7:18:13 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

RE: “... one never knows.”

LNG/CNG powered truck fleet power vs diesel makes so much sense for many reasons, yet the leading companies like WPRT and CLNE in the field have struggled for many years to show even a profitable quarter, let alone a profitable year. Electric power for heavy over-the-road truck transportation is vaporware at best. Now with the over-supply of oil coupled with a sputtering world economy, the future of NatGas as a transportation fuel is even more of a gamble.

T.B. Pickens has been the lone big voice promoting the concept and was met with failure to lobby Congress to pass Federal subsidies. However, there has been some activity among municipally owned bus and truck operations to contract with private enterprises to operate them, somewhat like the municipal electric power and phone companies of the early 20th century. What do you think of this approach?


12 posted on 05/20/2015 7:24:56 AM PDT by shove_it (The bigger the government, the smaller the citizen -- Dennis Prager)
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To: thackney

I thought that natural gas was a mix of gasses including propane, butane, hydrogen, carbon dioxide...


13 posted on 05/20/2015 7:34:12 AM PDT by mountainlion (Live well for those that did not make it back.)
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To: mountainlion
I thought that natural gas was a mix of gasses including propane, butane, hydrogen, carbon dioxide...

Raw natural gas, unprocessed straight from the well, contains varying amounts of those items and others.

Before it is used for residential, commercial or industrial processes, it is cleaned up to mostly methane. That is what arrives at our homes. While some basic separation may happen at the upstream facilities, most of it happens at a Natural Gas Processing plant.

http://www.eia.gov/pub/oil_gas/natural_gas/analysis_publications/ngpipeline/process.html/

What is commonly called "pipeline quality" may contain some minimal amount of ethane and some others, it is mostly a BTU/volume restriction to prevent damage to burner tips and the like.

In the process of creating LNG, essentially all of these non methane components liquefy at temperature warmer than methane. They are separated out, and LNG is a very pure methane liquid, and resulting gas after vaporized.

14 posted on 05/20/2015 7:52:39 AM PDT by thackney (life is fragile, handle with prayer)
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To: shove_it
LNG/CNG powered truck fleet power vs diesel makes so much sense for many reasons, yet the leading companies like WPRT and CLNE in the field have struggled for many years to show even a profitable quarter, let alone a profitable year.

It is a chicken before the egg problem. LNG fueling station are not economic without LNG vehicles to purchase their fuel. LNG vehicles are not practical/economic, without sufficient fueling stations.

It is a growing market, but it is slow growth and regional at first.

.B. Pickens has been the lone big voice promoting the concept and was met with failure to lobby Congress to pass Federal subsidies.

He is not the only voice, but certainly the loudest, particular after he set up his LNG fueling company.

However, there has been some activity among municipally owned bus and truck operations to contract with private enterprises to operate them, somewhat like the municipal electric power and phone companies of the early 20th century. What do you think of this approach?

There has been a "lot" of growth in this area. Fleet service type vehicles like metro buses, garbage trucks, are easier to break into the LNG since they return every night to the same location and have a large enough use to justify a dedicated fuel system. Some have added commercial public vehicle fueling as the cost to add a public lane outside the fence is rather minimal after the fleet service is built.

I don't understand the analogy to power and phone.

15 posted on 05/20/2015 7:59:03 AM PDT by thackney (life is fragile, handle with prayer)
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To: mountainlion

Here is a typical requirement of Natural Gas to be accepted into a Pipeline Transmission System. Distribution Systems also have similar requirements.

http://www.northernnaturalgas.com/InfoPostings/GasQuality/Pages/Requirements.aspx


16 posted on 05/20/2015 8:08:00 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney
There has been a "lot" of growth in this area..."

There has not been anywhere near sufficient growth to become a profitable business opportunity for the two major players in the field -- WPRT & CLNE.

I don't understand the analogy to power and phone.

You and I have had many debates over the years about government subsidies of the power business. My position has been that without government subsidies, the electrification and the communication infrastructure would have never occurred that made the USA the world leader it became. You consistently oppose ANY AND ALL forms of government subsidy. Where would we be today without those subsidies and the Interstate Highway System paid for by either government subsidies or outight direct funding?

17 posted on 05/20/2015 8:30:08 AM PDT by shove_it (The bigger the government, the smaller the citizen -- Dennis Prager)
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To: shove_it
There has not been anywhere near sufficient growth to become a profitable business opportunity for the two major players in the field -- WPRT & CLNE.

Because both are spending significant money expanding their infrastructure beyond the current demand. They are building to be in place to capture the future market.

If they were more worried about today's profits, they would not build out the infrastructure so far advance of the users. But then they would lose out on future market share. They are in it for the long haul.

My position has been that without government subsidies, the electrification and the communication infrastructure would have never occurred that made the USA the world leader it became.

I view it differently. It wasn't subsidies. It was a guarantee of profits paid by the users through creating regulated monopolies.

18 posted on 05/20/2015 8:36:46 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

The two major players in the field are puny small cap companies trying to fund their infrastructure and R&D by diluting the equity of their stockholders to do so. How many other “select” businesses get fed govt funding for their R&D and infrastructure — and I’m not restricting it to just the power and commo businesses?

Call it what you will, it was government funding and it included all forms of infrastructure including the TVA and dams, nuclear power plants, railroads, etc, etc. It’s been going on in just about every enterprise and has been for well over a century. Electricity, the telephone, railroads and highways were viewed as novelties at one time too but all those businesses were helped by the Fed Govt funding to raise the standard of living for all Americans since the 19th century.


19 posted on 05/20/2015 9:41:50 AM PDT by shove_it (The bigger the government, the smaller the citizen -- Dennis Prager)
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To: shove_it

There is a significant difference in building out original infrastructure, compared to using tax payer dollars to fund the next competing service.

Sorry you cannot understand that. We have a significant Natural Gas Transmission and Distribution Infrastructure. A Nat Gas Vehicle Fueling station is just another customer on the same lines.

It doesn’t need my tax dollars to work. It didn’t need my tax dollars to build the NatGas station near where I live. It doesn’t need our tax dollars to build one near you either.


20 posted on 05/20/2015 9:46:00 AM PDT by thackney (life is fragile, handle with prayer)
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