$60M LNG plant planned in N.E. Pa.
UGI Energy Services is expanding its alternative fuel footprint with 120,000-gallon-a-day facility.
BY ANDREW MAYKUTH INQUIRER STAFF WRITER
UGI Energy Services is doubling its capacity to produce liquefied natural gas, aiming to capture a bigger share of an alternative-fuel market for which Philadelphia Gas Works also has ambitions.
UGIES, a subsidiary of UGI Corp. of Valley Forge, announced Friday that it plans to build a $60 million plant in northeastern Pennsylvania to produce up to 120,000 gallons of LNG a day from 10 million cubic feet of Marcellus Shale natural gas.
The Wyomissing, Pa., company currently operates an LNG plant in Berks County.
LNG is produced by chilling natural gas to about 260 degrees below zero. At the new plant, UGIES plans to build storage tanks with a total capacity of about 280,000 gallons to maintain the supercooled fuel in a liquid state, said Matthew Dutzman, vice president of business development.
Traditionally, utilities have used LNG to store gas for high-demand winter days, a practice known as “peak-shaving.” Along with the shale-gas boom, LNG is experiencing growth in demand as a cleaner-burning, less costly alternative to diesel.
The new plant will allow UGIES to expand sales of LNG to emerging markets in the trucking industry and for remote power-generators, such as gas-drilling rigs or factories that are not served by gas utilities, Dutzman said. LNG also is being promoted as an alternative fuel for trains and ships that now burn diesel or oil.
Philadelphia Gas Works, the city-owned utility, is exploring an expansion of its LNG plant in Port Richmond after experiencing success selling surplus LNG to transportation markets. PGW says it received so much response to its expansion plans that it is considering enlarging its initial plan to add 15 million cubic feet of production capacity.
The PGW proposal is still in its preliminary stages, and would require approval of the Philadelphia Gas Commission and City Council. Council also is exploring proposals to enlist private partners to participate in an LNG project.
UGI, which operates three Pennsylvania gas utilities, has operated an LNG plant in Temple, Pa., since 1972. The Berks County plant was recently expanded to produce up to 120,000 gallons a day, the equivalent of 10 million cubic feet of gas.
The new facility would be adjacent to UGIES’s Manning natural-gas compression station in Wyoming County. The gas would be supplied by the company’s Auburn gathering system, which collects gas from local Marcellus Shale wells before delivering it to major interstate pipelines serving the region.
UGI is also the operator of the proposed $1 billion Penn East Pipeline, which would deliver natural gas from northeastern Pennsylvania to New Jersey utilities. amaykuth@phillynews.com
215-854-2947 @maykuth
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