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Major Rockland employer inks deal to convert to trucked-in natural gas

Darren Fishell | Bangor Daily News

PORTLAND, Maine — Boston-based Xpress Natural Gas has landed a contract to truck compressed natural gas to FMC BioPolymer in Rockland, where the major regional employer is preparing to change its primary fuel source this fall to save on energy costs and reduce emissions.

FMC, a multinational company that in Rockland processes seaweed into carrageenan, is an anchor customer for the natural gas distributor that bills itself as a stepping stone and alternative to piped gas for industrial and commercial customers.

“That’s our first large commercial customer in that area,” said Matt Smith, vice president for XNG. “It goes without saying that it’s the largest single energy account in that portion of the coast.”

The company delivers its gas out of distribution hubs in Eliot and Baileyville.

Smith said Rockland is a good market for the company because of the geological difficulties of installing natural gas pipelines.

“They call it Rockland for a reason — it’s all granite and laying pipe in granite is a challenge for any company,” Smith said, noting that his firm doesn’t necessarily see pipelines as competition. “There’s just enormous opportunity to bring gas into towns that realistically aren’t candidates for traditional pipelines but are perfect opportunities for gas by truck.”

XNG has grown its Maine footprint in the last year, expanding capacity at its Baileyville hub and building a new hub in Eliot, served by a separate major pipeline bringing gas north. Irving Oil has also entered the trucked compressed natural gas market in Maine, delivering its first truck of compressed natural gas to the McCain Foods processing plant in Easton in May 2013.

FMC spokeswoman Barbara Del Duke declined to detail what impact the conversion will have on the plant’s total energy costs, but wrote in an email that the company determined compressed natural gas was the best near-term change to cut its fuel costs and reduce greenhouse gases by about one-third.

Smith said the change would amount to a 40 percent reduction from FMC’s previous bill for No. 6 oil.

Del Duke said the conversion will also bring the company, which is the city’s largest taxpayer, into compliance with state law mandating sulfur fuel emissions reductions. She said the company is building the infrastructure to decompress the trucked natural gas as early as this fall and will modify its existing boilers to use the gas and convert its liquid fuel systems from using No. 6 fuel to No. 2 fuel.

That, Del Duke said, will further reduce the facility’s emissions and eliminate a need to heat the oil during periods of extreme cold.

Other major customers in the midcoast, including the Maine State Prison in Warren, have also considered converting to natural gas to save on heating costs. Smith said the deal with FMC allows the company to open up a new market in the midcoast.

“We’ve got several large employers that we’re working with now,” Smith said.

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A previous plan to build out pipelines and small natural gas-fired power generation facilities fell apart last year after assessing the cost, but Patrick Woodcock, director of the Governor’s Energy Office, said at the time that FMC’s conversion to use natural gas would make extension of a pipeline to the area more economically feasible. That’s because the company’s conversion means it, and perhaps other commercial clients, would already be prepared to connect to a pipeline should it arrive.

“The more successful we are, the more attractive that may be to bring in the pipeline,” Smith said.

But XNG’s customers are, by definition, those who aren’t waiting for a pipeline and are driving the company’s consideration of working with Maine Natural Gas to build a third terminal in Windsor, Smith said, to serve central Maine.

The deal with FMC has no immediate impact for residential customers, but the company has proposed an idea that it could serve as a bridge to major pipelines through the state, like the Maritimes and Northeast line, in order to provide gas to municipal pipeline networks.

Smith said regulations now prevent XNG from trucking gas to residential customers directly — an endeavor that also provides less-favorable profit margins — but partnerships with towns and pipeline builders could allow it to deliver gas to storage facilities that could then distribute gas by pipe to residences.

“Once we open up municipal uses and transportation as well, the sky’s really the limit in terms of how we can work with smaller users and broadening the market,” Smith said.

Smith said the company is working with one municipal customer in York County and recently signed a deal for a multiple-user account to serve both Cary Medical Center and the Maine Veterans Home in Caribou. The company also supplies gas to the Aroostook Medical Center, which became the first facility in the state to convert entirely to CNG last year, and other industrial customers.

Smith said across the company’s customer base, they’re now displacing the energy equivalent of about 10 million gallons of heating oil.

 

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