Integrys Energy Group Inc.’s (TEG) business wing, Trillium CNG, launched its first compressed natural gas station available to the public at Dillon Transport, 4612 S. 50th St. in Tampa, Fla.
Dillon Transport inked a fuel purchase agreement with Trillium CNG to service Dillon Transport’s fleet of 55 semi-trailer trucks. The company on Oct 21, 2013, had also announced to open the second compressed natural gas ("CNG") station at GasKwick.
Both the stations located near the Port of Tampa, Interstate 75 and U.S. Route 41 will allow easy accessibility to heavy-duty trucks. The S. 50th St. station is equipped with Trillium CNG's fast-fill hydraulic intensifier which will be supported by its 24/7 rapid response team.
In addition, the station has the capability to fuel three vehicles simultaneously. This will enable Integrys Energy to offer fast services as well as cater to an increasing number of customers.
Given the shale boom in the U.S. it is also essential to ramp up CNG related infrastructure. Its low-cost and clean burning nature makes CNG more attractive as a transportation fuel in the wake of stringent environmental laws in the U.S.
However, the company needs to be patient as the transition to CNG fuel from diesel will take time. Currently, natural gas fueled trucks are costlier than existing diesel trucks. Although incentive programs have been set up to accelerate the shift, these have proven to be an insufficient boost for conventional truck companies to make the switch from diesel.
The fiscal uncertainty is also acting as a bottleneck for the implementation of a proper incentive structure. Moreover, diesel is not ready to give up to CNG. The application of state-of-the-art filters in combination with diesel containing less than 50 parts-per-million sulfur will certainly catch the market’s attention.
Eco-friendly diesel filtering technology and more affordable fuel prices might render ultra-low-sulfur diesel more desirable than CNG which could affect Integrys Energy’s prospects. Presently, the company holds a Zacks Rank #4 (Sell).Read the Full Research Report on EXC
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