HEYCO Energy Group Inc announced it has executed a letter of intent with IPC (USA) Inc for 150,000 gallons per day of liquefied natural gas (LNG), or HEYCO’s entire first stage of production. The plant--located in Texas’ Lavaca County to serve the Eagle Ford shale play--should be producing by the fourth quarter of 2014.
“We are extremely excited to be partnering with a major wholesale fuel supplier,” said George M Yates, HEYCO chief executive officer. “IPC has intimate knowledge of the fuel distribution requirements of the E&P sector in South Texas, and has the foresight to expand their line of fuels to include cleaner, more affordable LNG.”
IPC will offer dual fuel supply options of both LNG and ULSD to its Eagle Ford basin customers. IPC supplies gasoline, diesel, jet fuel, and other refined petroleum products to several customer types including distributors, retail stations, trucking companies and industrial end-users. The company has contracts with more than 60 suppliers throughout the country.
“Our customers are looking for LNG fuel supply solutions today, and our relationship with HEYCO will provide us with long-term, high-quality LNG to meet that need,” said Oscar Okinaga, IPC chief executive officer. “By combining our fuel supply expertise and HEYCO’s long-standing relationships in the E&P sector, we expect to be a significant player in the domestic LNG market, starting in South Texas.”
HEYCO announced in late 2013 that it will install the first LNG facility dedicated to the energy sector and the southern Gulf Coast. The facility’s first-stage production capacity will be 150,000 gallons per day, and expandable to 300,000 gallons per day within six to eight months as demand dictates. Under the letter of intent, IPC will have exclusive use of HEYCO’s first-stage LNG capacity, with additional rights to HEYCO’s expansion capacity. IPC intends to provide dual fuel service options to its existing diesel customers, as well as other fuel distribution companies and industrial users.