The LNG facility would likely require only 10 acres
The plant would have a capacity of about 100,000 gallons per day and production could begin as soon as 2016, according to the joint-announcement. Liquefied natural gas is increasingly sought as an alternative to diesel fuel consumption.
Representatives of the companies said the new facility will be on land adjacent to the petrochemical complex that Flint Hills recently began demolishing in an effort expected to last through most of 2015. They declined to disclose cost.
Stabilis has about 78 acres under option in the area, but the LNG facility would likely require only 10 acres, said Jim Reddinger, chief financial officer and chief operating officer of Stabilis. The site offers the company proximity to pipeline connections and oilfield activity, he said. Stabilis will manage the facility, marking the company’s entry into the Permian Basin.
Stabilis is already taking orders for LNG and potential uses for the fuel could include non-oilfield equipment such as trucks, according to the announcement. But a major source of demand is expected from the pressure pumping engines used for hydraulic fracturing.
“Our No. 1 target is going to be the oilfield,” Reddinger said. “Theoretically, it should help these guys run their operations less expensively in a more environmentally friendly way with a resource that it domestically produced and secure in supply.”
The facility would provide a buyer of Permian Basin-produced natural gas at a time when companies often flare it because of lacking infrastructure and low prices.