GE and Chesapeake to Collaborate on Development of Natural Gas Infrastructure

HOUSTON - GE and Chesapeake Energy Corporation will collaborate on the development of infrastructure solutions that aim to accelerate the adoption of natural gas as a transportation fuel. This technology and services project marks a milestone toward the increased use of natural gas—an abundant, reliable and cleaner-burning source of energy for both consumers and commercial user, according to the companies.

To formalize the agreement, GE and Chesapeake have signed a memorandum of understanding on a product and services development partnership, representing a multi-year collaboration between the two companies to develop and bring to market compressed natural gas (CNG) and liquefied natural gas (LNG) transportation and natural gas home-fueling solutions. By improving access to CNG, which is most commonly used in light- to medium-duty vehicles such as pickups, vans, SUVs, taxicabs, transit buses, refuse and delivery trucks as well as consumer vehicles, along with LNG, which is commonly used for heavy-duty industrial purposes, dependence on foreign energy sources can be reduced while simultaneously lowering fueling costs and vehicle emissions, according to the companies.

The collaboration is designed to leverage GE’s global oil & gas technology portfolio with Chesapeake’s expertise in developing innovative fueling solutions to lower the ownership and operational costs of natural gas vehicle (NGV) fueling stations. With the development of shale resources dramatically increasing the amount of low-cost natural gas in North America, the GE-Chesapeake collaboration could help incentivize operators to put more NGVs on the nation’s highways.

As part of the collaboration, beginning in the fall of 2012 GE will provide more than 250 modular and standardized CNG compression stations for NGV infrastructure. These units, also known as “CNG In A Box,” have, according to GE, gone through its rigorous ecomagination-qualification process and will provide the core infrastructure to enable expanded access to CNG at fueling stations and other designated installations.

A vehicle using CNG can reduce annual fuel costs up to 40 percent, assuming 25,700 miles per year driven, gasoline priced at $3.50/gallon and CNG at $2.09/gasoline gallon equivalent. This represents savings totaling as much as $1,500 per fleet vehicle per year. In total, for each fleet vehicle using fuel provided by CNG In A Box instead of gasoline, a fleet operator can reduce CO2e emissions from fuel combustion by about 24 percent, or 2.2 metric tons per vehicle annually, assuming an average fleet vehicle travels approximately 25,700 miles per year.

This CNG technology will be brought to market by Peake Fuel Solutions — a Chesapeake affiliate — which has experience with natural gas vehicles, vehicle emission controls, and natural gas market dynamics. Chesapeake also brings in-house expertise in CNG market development to the GE collaboration, including retail station relationships, fleet outreach and education programs and policy engagement.

CNG In A Box takes natural gas from a pipeline and compresses it onsite at an industrial location or at a traditional automotive refilling station to then turn it into CNG. A CNG vehicle, such as a taxi, bus or small truck, can then refill its tank using a traditional fuel dispenser, much like those used for diesel or gasoline refueling.

Key features include:
• The gas compression, storage, cooling, drying and controls are easy to ship and maintain due to its compact “In Box” design.
• The units come in two configurations: an 8-foot x 20-foot container or 8-foot x 40-foot container, depending on the site’s need.
• Its modular and intuitive design makes it “Plug & Play” on-site.
• The offering includes GE Wayne branded dispensers with credit card capability and provision for “Point Of Sale” interface.
• The fuel dispenses at a rate of about 7 gasoline gallon equivalent per minute.

Other elements of the new collaboration include:
• Aftermarket services for natural gas fueling infrastructure.
• GE’s LNG fueling plants, which adapt GE’s proven large-scale LNG liquefaction technologies to smaller-scale operations. Using LNG as a substitute for diesel or fuel oil can reduce combustion emissions up to 25 percent.
• Development of home refueling technologies.
• Co-marketing of products and services resulting from the partnership.