Ferus Natural Gas Enters JV with Chinese LNG Firm to Build Liquefaction Plants in Western Canada

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By Esther Tanquintic-Misa | November 20, 2013 1:36 PM EST

Canadian firm Ferus Natural Gas Fuels on Tuesday announced it has entered into a joint venture with a Chinese-owned liquid natural gas (LNG) distributor to build two liquefaction plants in Edmonton and Vancouver in Western Canada for $100 million.

Ferus will build and operate the plants, according to Dick Brown, CEO of Ferus. Its partner, ENN Canada, gets 20 per cent stake ownership. It has likewise committed to purchase a significant amount of the product.

ENN Canada is a subsidiary of ENN Group, one of China's largest natural gas distributors.

"The benefits of fuelling with natural gas are significant," Henry Cai, CEO of ENN Canada, said in a joint statement.

"Natural gas over diesel represents a 30 to 40 per cent cost savings to the end user and contributes up to a 25 per cent reduction in greenhouse gas emissions."

ENN has 14 LNG stations in the U.S. under the brand name BLU. It currently has more than 130 stations in China. For its Canada plans, it targets to build five stations - three in British Columbia and two in Ontario.

"They're building out their fuelling stations around these plants so they will be putting capital into expanding that," Mr Brown said.

"The joint venture has an agreement with ENN to baseload the facilities."

"In order for our customers to make the switch to natural gas, they need certainty of an uninterrupted supply of LNG to fuel their equipment. These two LNG liquefaction plants, along with the specialised distribution equipment and planned retail fuelling stations, will ensure that supply, which in turn will promote and facilitate the widespread usage of LNG in Western Canada," he added.

The Edmonton and Vancouver liquefaction plants will initially be built to produce 379,000 litres (100,000 U.S. gallons) of LNG per day, with capacity to expand as demand grows. First output is expected in 2016.

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