CALGARY - Two companies are teaming up to build liquefied natural gas plants in Edmonton and Vancouver to serve the transportation industry.
In announcing their joint venture Tuesday, Ferus Natural Gas Fuels and ENN Canada Corporation said the plants will provide a cheaper and cleaner-burning fuel to the trucking business.
The fuel can also be used in the marine, rail, mining and oil and gas exploration industries.
"The benefits of fuelling with natural gas are significant," said ENN Canada CEO Henry Cai, whose company is a subsidiary of one of the biggest natural gas distributors in China.
"Natural gas over diesel represents a 30-40 per cent cost savings to the end user and contributes up to a 25 per cent reduction in greenhouse gas emissions."
The plants will initially produce 100,000 U.S. gallons per day (379,000 litres) of LNG — natural gas that has been chilled into a liquid state, making it easier to transport.
Ferus and ENN will pick sites for the plants within six months, with startup expected in 2016.
The companies did not say how much their project would cost.
Although natural gas is cheap and abundant in North America, it has been slow to catch on as a transportation fuel because of the lack of refuelling infrastructure.
That's one of the biggest challenges, said Ferus CEO Dick Brown.
"In order for our customers to make the switch to natural gas, they need certainty of an uninterrupted supply of LNG to fuel their equipment," he said.
"These two LNG liquefaction plants, along with the specialized distribution equipment and planned retail fuelling stations, will ensure that supply, which in turn will promote and facilitate the widespread usage of LNG in Western Canada."
Ferus is privately held by the Energy & Minerals Group, a management company for various specialized private equity funds. Ferus will oversee the design, engineering, construction, operation and marketing of the Edmonton and Vancouver facilities.
ENN's parent company has 150 LNG fuelling stations in China and the United States. ENN Canada plans to open five more in British Columbia and Ontario by the end of this year. It has committed to use a "significant" amount of LNG from the Vancouver and Edmonton plants in its network.
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