Stabilis Energy announces signing of Definitive Agreement to Purchase Encana Natural Gas Inc.'s domestic LNG business
Combined company to be a leading provider of Liquefied Natural Gas fueling solutions to high horsepower engines
by Stabilis Energy media release
April 14, 2014
BEAUMONT, TX--(Marketwired - April 14, 2014) - Stabilis Energy announced that it has signed a definitive agreement to purchase substantially all of the U.S. based assets of Encana Natural Gas Inc. (ENGI). Denver-based ENGI is a leading distributor of liquefied natural gas (LNG) fuel to domestic high horsepower engine operators in the oilfield, mining, rail, marine, over the road transportation, and industrial sectors. ENGI is a subsidiary of Encana Corporation. The transaction is scheduled to close on April 30, 2014. Terms of the transaction were not disclosed.
"We are proud to announce the addition of Encana Natural Gas Inc.'s people, assets, and customer relationships to Stabilis Energy," said Casey Crenshaw, President and CEO of Stabilis Energy. "ENGI has a world-class staff that will help us reach our goal of being the leading provider of LNG fuel solutions to high horsepower operators in North America. They possess deep sector expertise and strong customer relationships that we believe will make Stabilis Energy an LNG industry leader across multiple geographies and end markets."
In addition to adding ENGI's staff, Stabilis has agreed to purchase its fleet of cryogenic rolling stock assets including storage and regasification trailers, mobile fueling units, and other related equipment. Stabilis will fulfill all of ENGI's existing customer obligations including its existing contracts, subject to customer consent. Crenshaw stated, "Stabilis is excited about growing the LNG market in partnership with ENGI's market leading customers."
"Encana Natural Gas Inc.'s customers should expect business as usual -- with the same great people, great equipment, and great customer service," said Jim Reddinger, Chief Operating Officer of Stabilis Energy. "But they also will benefit from the expanded scope and scale of the new Stabilis Energy business. Our fully integrated LNG fuel solutions offering -- spanning from LNG production to delivery and on-site technical service -- will give our customers the confidence they need to choose LNG to fuel their mission critical high horsepower engine activities."
Stabilis plans to open its first LNG production facility in George West, TX in January 2015 to service oilfield customers in the Eagle Ford shale. The facility is being built as part of a previously announced venture with Flint Hills Resources LLC, a leading refining, chemical and biofuels company and a subsidiary of Koch Industries, to build up to five LNG production facilities that target oilfield customers. The George West facility is under construction now and will be able to produce approximately 100,000 LNG gallons per day when complete. Other targeted LNG liquefaction plant locations include West Texas, North Dakota, and other major oilfield regions. Stabilis also will continue to source fuel from ENGI's large existing third-party supply network.
"Encana is pleased that Stabilis Energy will carry on the outstanding LNG business that our Natural Gas team has worked hard to build over the past several years," said David Hill, Executive Vice-President of Encana Corporation. "Encana believes that natural gas has a bright future as a domestic fuel source for high horsepower engines and that LNG will be an important part of this value chain." Encana will remain a customer of Stabilis Energy for LNG.
After the transaction closes, Stabilis Energy will operate one of the largest cryogenic rolling stock fleets in North America across 20 states and multiple end markets, including oilfield, mining, rail, marine, and general industrial. Senior management teams from both organizations will assume leadership positions with Stabilis Energy.
About Stabilis Energy
Stabilis Energy is one of the fastest growing suppliers of liquefied natural gas (LNG) to the oilfield sector in North America. Stabilis also serves other end markets including mining, rail, and industrial. Stabilis provides turnkey fuel solutions to help industrial users of diesel and other crude-based fuel products convert to LNG, resulting in reduced fuel costs and improved environmental footprint. Stabilis is vertically integrated from LNG production (beginning January 2015) through distribution and cryogenic equipment rental. Stabilis is headquartered in Beaumont, TX and is privately held.
COO and CFO