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Clean Energy Fuels Corp. Message Board

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  • wskip99 wskip99 Nov 23, 2012 9:44 AM Flag

    A Possible Developing Negative

    guru,
    The cost spread between NG & Gasoline or Diesel still has a long way to go before it becomes a concern.You need to take into account that a MmBTUs NG is 7 DGEs (Diesel Gallon Equivalents) As to export of LNG , how much of an impact will it have? Not as much as some seem to think.Let's look at it for a second & do some quick math. NG at $4 add $2 for liquefaction and $2 or $3 for transport. At current prices you're at $7-8 delivered. A 20% gross margin puts you at about $10. If prices go a lot higher exportation will not be profitable.

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    • wskip

      You have good points wrt LNG exports.

      The other issue is CLNE profitability. The fueling station's profitability is a function of the future's spread. If the futures spread narrows, the CLNE fueling stations may still want to keep the spread at $1.50 so as not to slowdown the trucking industry's move to NG and therefore have a lowered profit.

      The bottom line is a greater spread, a greater profit for CLNE which can pocket a greater portion of the difference. The opposite occurs as the spread narrows.

 
CLNE
5.23+0.54(+11.51%)Dec 19 4:00 PMEST

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