Universal LNG Holdings Inc. has announced it is acquiring HEYCO LNG's 64-acre facility in Yoakum, Texas to build the first LNG facility dedicated to the energy sector in the Southern Gulf Coast. The acquisition could provide a much-needed boost to a domestic energy industry struggling under high production costs. Details of the acquisition are undisclosed, but both parties are pleased with the venture.
The plant, which is expected to be operational within 11 months, will produce 300 000 gal./d of LNG, with the potential to expand to more than 800 000/day. Domestic LNG production coupled with several key initiatives have the potential to reduce the cost of oil and gas production in the US by an estimated 20% per bbl - a savings that could relieve a greatly strained domestic energy industry.
The production of greener, cheaper LNG will have a positive effect on energy markets worldwide, and Universal LNG Holdings, Inc., a Houston-based global LNG solutions company, sees small- and mid-scale LNG plants as critical regional "Diesel Displacement" solutions.
"The US energy sector is in dark days right now. All major producers are seeking ways to reduce costs per barrel - LNG has the potential to effectively rescue our nation's troubled industry," said Jeffrey Liu, CEO of Universal LNG Holdings. "We will reduce the cost of oil production to help keep the energy sector surviving through these dark days. Then, when the good times roll again, our LNG will introduce increased margins."
It is this level of insight and forward-thinking that made Universal LNG Holdings a natural fit for the Yoakum property, said Chris Coleman, President of HEYCO LNG: "Universal LNG's core technologies and strong global partnerships instilled confidence that this acquisition will maximise the value of our property," Mr. Coleman said.
The operations will particularly benefit from such strong partners as CMI and its affiliate California Cartage, one of the most prestigious and respected brands in logistics, who will be a key player in oil field production cost reduction. Logistics is responsible for more than 35% of all costs of goods delivered to oilfields. By employing a combined Smarter and Greener Logistics Program, Universal and CMI will significantly slash large line item costs such as propant/frac sand costs and water treatment costs.
Reservoir Silicates, who will partner with Universal LNG to provide propant/frac sands and treatment of post-frac water, will also greatly help reduce the costs of operations while increasing efficiency. The Canadian company is a leader in providing North American energy markets with high-quality Northern White frac sand.
These strong partnerships are the foundation upon which Universal LNG will build a powerful U.S. oil and gas cost reduction initiative.
In the coming months, Universal LNG Holdings will name a major oil and gas operator client to receive LNG produced at the plant. The Yoakum plant is also expected to supply LNG to Universal's "green fleet" of more than 15 tractor-trailer trucks, the first in the country with the capability to haul 80 000 pounds of goods for more than 700 miles per fill-up.
Universal LNG Holdings also plans to use its active export license to supply LNG to Mexico.
While this is the first such plant for Universal LNG Holdings, the company is also eying possible facilities on the East Coast, the Dakotas and Africa.
"The largest market potential for LNG is the displacement of expensive, polluting diesel fuel," Mr. Liu said. "Cleaner-burning dual-fuel engines allow displacement of up to 60% of diesel with no degradation in performance. Universal LNG Holdings is positioned to supply the LNG required to transform the market and change the oil industry worldwide."
Edited from press release by Angharad Lock
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