Crowley Maritime said its petroleum services group is entering the liquefied natural gas (LNG) market by acquiring Carib Energy, a Coral Springs, Fla.-based company that was founded in 2011 to export LNG to industrial facilities in the Caribbean and Latin America.
Carib Energy plans to export LNG in 40-foot tank containers, which it says allows it to serve markets that do not justify or cannot receive large tanker ships of LNG.
Crowley said its acquisition is part of a more general plan to grow its involvement in LNG transportation and might include transportation of LNG in bulk vessels.
“Whether it’s designing the next LNG bulk transport vessel, transporting ISO tanks via Crowley’s regularly scheduled liner service, arranging special carriage via our global logistics network or providing project solutions for LNG discovery and extraction; Crowley has the service portfolio to provide turnkey solutions within the LNG space,” said Tom Crowley, the company’s chairman and chief executive officer.
Crowley has formed an LNG services group, headed by Matt Jackson, vice president of business development, within its petroleum services business unit, led by Rob Grune, senior vice president and general manager, petroleum services. Greg Buffington, president of Carib Energy, will join Crowley as vice president of Carib, reporting to Jackson.
In an interview with American Shipper
on Thursday, Jackson explained companies seeking to export LNG need authority to do so from the federal government.
Carib Energy in 2011 received authority from the Energy Department
to export up to 11.53 billion cubic feet of natural gas per year for a 25-year period to countries with which the United States has free trade agreements in Central America, South America, or the Caribbean by vessel in ISO containers.
Carib also has a request pending
before the Energy Department to export up to 600,000 gallons per day of LNG (revised upward in December from its original request for 120,000 gallons per day) to countries that do not have free trade agreements with the United States.
Crowley’s request is one of many pending
before the Energy Department as the federal government considers how much natural gas it wants to export.
Jackson said Crowley and Carib plan to build tanks that will hold about 10,000 gallons of LNG. LNG is natural gas that is cooled to -260° Fahrenheit until it becomes a liquid and then stored at essentially atmospheric pressure. Converting natural gas to LNG reduces its volume about 600 times.
The tanks Carib and Crowley will use are essentially giant insulated thermos bottles in frames so they can be loaded onto container vessels. Jackson said they can hold LNG for about 60 days without gas boiling off, but LNG moving in the ISO tanks would be offloaded into shoreside storage tanks so the containers could be returned to the United States more quickly for reloading.
Crowley is looking at serving customers that typically might need 5,000-30,000 gallons of LNG per day to fulfill their power requirements.
Customers might include manufacturers, warehouses with large refrigeration needs, or hotels.
The company hopes by this fall to move gas to customers in the U.S. Virgin Islands and Puerto Rico, perhaps 30 containers per week, but Jackson said that number could grow to hundreds of containers per week.
“We definitely see this as a growing market segment for Crowley,” he said.
Bringing the two companies was “a great fit, bringing the energy side and the transportation side together to provide a reliable, safe, cost-effective solution,” he added.
Crowley will ship the containers to 25 islands in the Caribbean and would also provide the same service to Central America.
Jackson said Crowley's other units are interested in expanding into the LNG business.
Jensen Maritime, Crowley’s Seattle-based naval architecture and marine engineering company, is actively marketing its ability to design vessels that are powered with LNG or transport LNG.
Crowley is also interested in building and operating ships or tug-and-barge units that would transport LNG just as today the company transports petroleum products in both barges and self-propelled vessels. - Chris Dupin