Dresser-Rand Group Inc.’s first small-scale liquefied natural gas (LNG) plant, known as LNGo™ has successfully produced LNG. The Company designed, constructed and commissioned this demonstration plant, which has reached a key milestone with the initial production of LNG. Extended performance and endurance testing is being initiated as the final step prior to full market release.
Dresser-Rand President & CEO Vincent R. Volpe, Jr. said, “We are very excited about this technology for small-scale LNG production, which allows for very small stand-alone plants that are portable and can be moved to support changing requirements and needs. The standard LNGo plants are sized to produce approximately 6,000 gallons of LNG per day.”
The development process began in earnest less than one year ago, following an agreement reached with New York based technology company Expansion Energy LLC for a license to that company’s proprietary VX™ Cycle technology for small-scale LNG production.
Volpe says Dresser-Rand already has over 90 qualified leads, broadly classified as sale or lease opportunities. In the “for sale” category, the Company would provide the liquefaction process and, depending upon the plant configuration, potentially also include the associated ancillary gas processing equipment, a power module and full turn-key installation and commissioning.
In the “rental” or “lease” space, the Company is presently evaluating several market strategies, including potential market channel partners, and expects that, over the coming weeks, it will determine which approach is expected to create the greatest shareholder value.
Dresser-Rand expects orders to be placed for the first several units either late in 2013 or early next year with orders booked in the next several months converting to shipments in 2014.
Upstream applications include, among others, the monetization of flared gas to increase revenues for oil companies and reduce their environmental impact, the production of stranded natural gas fields, which are not close to existing pipeline infrastructure, on-site fuel supply for drilling and hydraulic fracturing equipment converted to run on LNG, and applications for coal bed methane for fueling mining vehicles. Downstream applications include the production of vehicle-grade LNG, allowing LNG to compete effectively with diesel fuel on a cost-per-energy-content (BTU) basis.
Driven by rapidly expanding global shale gas development and continued price differentials between natural gas and oil, Dresser-Rand predicts that the market for distributed, small-scale LNG production plants will grow from early adopters in North America to a broad, robust market for users around the world. North America is the most rapidly growing market and the substantial price disparity between diesel fuel and low priced natural gas has oil-field service operators, oil and gas companies, shipping and delivery companies, and downstream fuel distributors/marketers across the region converting drilling rigs, industrial mining equipment, transportation fleets and retail fueling stations along the United States interstate highway system to LNG fuel.