ALLENTOWN, Pa. & SEAL BEACH, Calif. -- Lehigh Gas Partners LP, a leading wholesale distributor of motor fuels, and Clean Energy Fuels Corp., a major provider of natural gas for transportation, have agreed to develop compressed natural gas (CNG) fueling stations at as many as 20 Lehigh Gas facilities.
The stations will be accessible to the public for CNG refueling and located for commercial CNG fleets, including shuttles, taxis, small- to mid-sized trucks and other natural gas vehicles (NGV). Clean Energy will be responsible for the construction and operation of the stations and the management, marketing and sales of CNG at Lehigh Gas sites.
"Over the next 12 months, we would do about five to seven of the sites with Clean Energy," Joe Topper, chairman and CEO of Lehigh Gas Partners, said during the company's fourth-quarter 2012 earnings conference call on Tuesday.
"We are having a planning meeting next week to do the first implementation, and that probably between 18 to 24 months, the full build out will have occurred. ... We have about 80 sites in Pennsylvania that would match up with the ability to put in CNG stations, and we probably have a similar number in Ohio and New Jersey."
He also discussed why the company has partnered with Clean Energy.
"We did it for two reasons. It will allow us to build out faster. Their cost of capital was cheaper than our cost of capital. And so they're putting up the capital and we're sharing in the margin. What we get from them is they have a very strong sales force for implementation and utilization. So we want to grow the field, we want to grow quickly, and we thought partnering with Clean Energy and their experienced distribution system was the best way to grow," said Topper.
"Lehigh Gas appreciates the leadership position Clean Energy has taken in the development of CNG and is pleased to partner with them to offer an alternative fuel option to help people get where they need to go. This agreement supports our alternate-fuel strategy of developing refueling sites both on our own and also with best-in-class providers like Clean Energy," said Topper said in a press statement announcing the deal.
"Lehigh Gas has been early to recognize the significant environmental and lower-cost benefits of natural gas and is a great fit as Clean Energy's partner in publicly accessible CNG stations," said Greg Roche, Clean Energy's vice president for national accounts.
Priced up to $1.50 less per gasoline-gallon equivalent than diesel fuel, the use of natural-gas fuel reduces costs significantly for vehicle and fleet owners and lowers greenhouse-gas emissions up to 23% in medium- to heavy-duty vehicles, according to Clean Energy. Additionally, natural gas is a secure North American energy source, as 98% of the natural gas consumed in the United States is produced in the United States and Canada.
Clean Energy Fuels is a major provider of natural gas fuel for transportation in North America and a global leader in the expanding NGV fueling market. It has operations in CNG and liquefied natural gas (LNG) vehicle fueling and construction and operation of natural gas fueling stations.
Lehigh Gas Partners, Allentown, Pa., engages in the wholesale distribution of motor fuels and owns and leases real estate used in the retail distribution of motor fuels. It owns and leases sites in nine states: Pennsylvania, New Jersey, Ohio, Florida, New York, Massachusetts, Kentucky, New Hampshire and Maine.
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