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Date: Mon, 11 Dec 2000 05:27:00 -0800 (PST)
From: russell.dyk@enron.com
To: john.arnold@enron.com
Subject: LNG on the road
Cc: jennifer.fraser@enron.com
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Re: trucking LNG to California - 

The short answer is that trucking LNG to California is not a feasible option 
for endusers other than companies with LNG-fueled vehicle fleets. There are a 
couple of reasons for this. 

First, California has a relative abundance of LNG fueling stations but only 
two plants capable of regasification. One serves Borrego Springs, a small, 
affluent desert community near San Diego. The other is dedicated to military 
and industrial supply near Sacramento. I spoke this morning to Applied LNG 
Technologies, which is based in Amarillo and has the second largest LNG truck 
fleet (after Transgas in Massachusetts). It shouldn't be a surprise that I 
was not the first to call regarding this question. While ALT's fleet is 
operating at capacity - trucking LNG from liquefaction plants in Wyoming and 
Topock, Arizona - it's serving its normal fleet customers in Southern 
California and Nevada, and Arizona. The Topock, AZ plant is owned jointly by 
ALT and El Paso, and receives gas from El Paso for liquefaction and 
subsequent loading onto trucks.

Second, LNG trucks, unlike LNG tankers, carry an extremely small volume. The 
average truck carries 10,000 gallons of LNG, which translates roughly into 
820,000 cubic feet. ALT has about 23 vehicles so potentially one could 
deliver 18.8 mmcf. However, these trucks don't regasify LNG, they merely 
transfer it into storage. 

The only really viable option for putting gas into the pipeline system would 
be a portable pipeline unit, of which ALT has the only one (it's under 
repair). It can deliver high pressure gas at 1800 cubic feet/minute (2.6 
mmcf/day if it runs 24 hours). It has connections for two LNG trucks at a 
time - one live and one backup, so it can operate continuously. In the past, 
ALT has used the unit to cover industrials who had a supply outage for some 
reason. 

I'm going to continue gathering info on domestic LNG peakshaving plants, etc. 
I think the opportunity may lie more in future, more strategically located 
peakshaving plants rather than LNG trucking arbitrage. 

Please let me know if you have specific questions.