Gulf Pledges to Assist Customers with the Transition to LNG
New England’s Gulf Oil detailed its plans for liquefied natural gas this week, then followed up the announcement with word that it’s opened the first three of four new E85-ethanol fueling stations for drivers on the Massachusetts Turnpike (I-90).
Word of the firm’s 34 LNG tractors broke late this past spring when Gulf senior VP Laura Scott outlined plans for deployment at three company yards at a conference in Pennsylvania (F&F, June 6).
Gulf says it will supply and distribute LNG to customers in the transportation sector and other interested bulk users, “part of the company’s ongoing strategy to diversify its energy offerings and provide the marketplace with a fuel alternative that is cheaper, cleaner, and domestic.”
Big Savings Possible
“The economic benefits are remarkable,” she said. “Fleets that have more than 10 vehicles that use at least 20,000 gallons per year in a ‘return-to-base operation’ can expect to lock in an after-tax internal rate of return in the 20 to 35% range.
“For our own fleet, we locked in a five-year discount against diesel costs to guarantee a significant return on investment.”
Gulf has deployed Peterbilt 386 trucks with 15-liter engines from Westport Innovations. As reported, they were supplied via McDevitt Trucks, of Tewksbury, Mass.
To foster the overall LNG business in its area, Gulf says it will “assist its fleet customers in all aspects of conversion, including vehicle selection, acquisition, hedging, operations, and regulatory requirements.”
“At Gulf, we believe the most effective way to increase market penetration for natural gas in the transportation sector is for large, centrally-fueled fleets that self-supply to lock in the current spread between natural gas and diesel, which will ensure a return on their investment even if the price of crude oil declines back below $75 per barrel,” Gulf Oil president Ron Sabia says in this week’s announcement.
They Know What They’ll Pay
“They will know on a daily basis what price they are paying and will not need to rely upon a third party’s retail price.”
Scott said in Pennsylvania earlier this year that the price premium for the LNG Peterbilts is approximately $65,000 per vehicle, and that Gulf is looking at maintenance shop retrofit costs that could range anywhere from $125,000 to $750,000 per facility.
Gulf’s new MassPike E85 outlets are fruit of a partnership with the Massachusetts Department of Transportation. The first three are operational, as is Gulf’s first E85 station in Massachusetts, which opened at Logan Airport in 2008.
“No longer does one form of energy serve all of our needs; it is the combination of varied sources with environmental impact in mind that together will frame a stronger foundation for our new energy future,” Sabia said in Gulf’s Thursday release. There are more than 100,000 FFVs – flex-fuel vehicles – registered in Massachusetts, Gulf says.
Gulf Oil info (Warner Communications), Derek Beckwith, 978-526-1960, ext 301; mobile 617-331-3567; [email protected]