Gulf officials say the move into the LNG marketplace is 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.
"Investing in LNG-powered vehicles is an important step for Gulf Oil and for our nation," said Joe Petrowski, CEO of the Cumberland Gulf Group of Companies. "Natural gas can provide significant cost benefits as a transportation fuel source, while burning cleaner and reducing dependence on foreign oil."
"We intend to convert more of our fleet and to supply and distribute LNG to our customers," said Laura Scott, senior vice president of New Business Ventures. Scott said fleets that with 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's new vehicles are Peterbilt 386 LNG trucks with Westport Heavy Duty 15-liter high-pressure direct injection systems.
Gulf will help 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," said Ron Sabia, president of Gulf Oil. "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."