San Antonio Business Journal: Heyco will build $91 million plant to convert Eagle Ford gas to alternative fuel

 

May 1, 2014

By 

A unit of Dallas-based Heyco Energy Group will to build a $91 million plant east of San Antonio that will produce liquefied natural gas, or LNG, for use by operators in the Eagle Ford Shale oil-and-gas play, officials say.

Heyco Energy’s Heyco LNG subsidiary expects to break ground in May or June on the facility, which will convert natural gas extracted from the shale into LNG that can fuel drilling rigs and hydraulic fracturing equipment used there, company presidentChris Coleman says. The site will employ eight to 12 people.

“Producers have figured out that it takes a lot of energy to find and produce energy,” he says. “They’re recognizing that LNG is less expensive than diesel fuel and has lower emissions.”

An increasing number of South Texas oil and gas producers are using cleaner fuels to both to cut costs and reduce their contribution to greenhouse gas creation.

Heyco’s plant will be located on alternate U.S. Highway 77 about an hour and a half east from San Antonio in Lavaca county, near one of the busiest swaths of the Eagle Ford. The company will purchase gas from a nearby Enterprise Products Partners pipeline, Coleman says.

The facility’s location near Interstate 10 eventually will enable the facility to serve the transportation sector, Coleman adds.

An increasing number of businesses use LNG in their vehicle fleets, and some experts expect consumer acceptance of the fuel to grow over time. Companies including California’s Clean Energy Fuels Corp. have opened Texas filling stations that offer the fuel.

The company plans to complete its plant in eight to 11 months. Initially the facility process 150,000 gallons of LNG daily, but that capacity could be doubled with eventual upgrades, according to Coleman. It will sell to fuel distributors, not directly to the public or LNG users.

Lavaca County commissioners earlier this week voted to create an investment zone at the plant site and offer tax breaks to facilitate the project, according to a report in the Victoria Advocate newspaper.

Lavaca County Judge Tramer Woytek was unavailable for comment on the project at press time.

Heyco primarily manages domestic and international oil and gas exploration and production projects. The Lavaca plant would be its first LNG processing facility.

Sanford Nowlin covers energy/utilities, transportation/aviation and manufacturing.

Contact:
Lauren Yates

lyates@heycoenergy.com

703.593.3184