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. Denver-based ENGI is a distributor of liquefied natural gas 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 Corp. The transaction is scheduled to close on April 30. Terms of the transaction were not disclosed.
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.
Stabilis plans to open its first LNG production facility in George West, Texas, 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, a 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.
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.