January 10, 2013

Maine companies tapping into virtual pipeline – tanker trucks

By Tux Turkel tturkel@pressherald.com
Staff Writer

(Continued from page 1)

20110419_Millinocket
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File photo: The Katahdin Paper Mill in East Millinocket.

Gordon Chibroski

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Tanker trailers filled with liquefied natural gas feed the Madison Paper Industries mill last fall. LNG is replacing 8 million gallons of oil a year at the mill, and saving the company millions of dollars.

Photo Courtesy of Xpress Natural Gas

CNG, LNG, propane: What's the difference?

Compressed natural gas, or CNG, is made by reducing the volume of natural gas to less than 1 percent of what it occupies at standard atmospheric pressure. CNG can be used as a substitute for gasoline to power vehicles; the city buses in Portland are an example.

Liquefied natural gas is a similar but different way to store natural gas. CNG is gas stored at air temperature, but at high pressure. LNG is gas stored at a very low temperature, which changes it into a liquid.

CNG tends to be less expensive to make and store than LNG, which needs expensive cooling equipment and cryogenic tanks. Both CNG and LNG can be used as heating fuels.

Propane is a byproduct of natural gas and petroleum refining. The fuel is more expensive than natural gas, but it can be stored in a liquid state under moderate pressure in low-cost steel tanks, making it useful for cooking and heating.

Propane has been delivered by truck for decades. Now that practice is growing for CNG and LNG.

In the Northeast, the abundance of natural gas found in shale deposits in New York and Pennsylvania has lowered wholesale prices. That has made it economical to truck both compressed natural gas and liquefied natural gas to rural areas not served by pipelines.

The construction of a CNG compressor station in the Washington County town of Baileyville, next to the Maritimes & Northeast Pipeline, is expected to make the fuel more available this year to businesses looking for alternatives to heating oil.

n This winter, Xpress Natural Gas will begin hauling compressed natural gas from Baileyville to The Aroostook Medical Center in Presque Isle. Heating with CNG, as it’s known, will save the hospital up to $500,000 a year.

Xpress Natural Gas is negotiating with both Madison Paper and Lincoln Paper about switching from LNG to CNG when Baileyville opens. Compressed gas is less costly to handle than LNG, and Baileyville is closer than Boston to the mills, cutting transportation costs.

Both mills say they are considering their options. They’re weighing the savings of CNG by truck versus the potential of a pipeline that might offer lower costs.

“For us, we’re still evaluating and gathering data,” said Keith Van Scotter, CEO at Lincoln Paper. “A pipeline may make sense in the long haul, but the guys at Xpress Natural Gas are clever. They recognize a need and they’re filling it.”

Xpress Natural Gas has signed contracts for CNG with a half-dozen other large energy users in Maine, said Matt Smith, the company’s executive vice president for sales and marketing. Names are being withheld for now, but they include a potato processor and a textile plant, he said, and discussions are under way with one or more colleges.

The company is considering setting up a second station in central Maine later this year, perhaps in the Augusta area.

“In many applications, our service is less expensive than a pipeline,” Smith said. “That’s very important. A pipeline is a terrific way to get gas, but we can be a more affordable option.”

The principals in Xpress Natural Gas include part of the investment team that launched the massive Backyard Farms greenhouse tomato operation in Madison, which is heated with LNG. The company has purchased 20 of the special gas tankers, which are certified to safely contain their cargo in a 60-mph rollover.

Xpress Natural Gas is building the Baileyville compressor station inside the former Louisiana-Pacific strandboard mill, so tankers can be filled regardless of weather conditions. Each tanker can hold the equivalent of 4,000 gallons of oil.

The company put the station in Baileyville in order to tap a connecting gas pipeline built for the Woodland Pulp mill. That mill formerly burned more than 10 million gallons of oil a year. Its $12 million conversion to gas had a payback of one year.

The business model being pursued by Xpress Natural Gas mirrors a similar operation starting in Vermont. NG Advantage LLC is building a compressor station in Milton, Vt. It’s first two customers are Pike Industries Inc. and Putney Paper Co.

 

Staff Writer Tux Turkel can be contacted at 791-6462 or at:
tturkel@pressherald.com

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