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Integrys Unveils Second CNG Station

Zacks Equity Research

Integrys Energy Group Inc.’s (TEG) business ancillary, Trillium CNG, officially unveiled its second compressed natural gas (:CNG) station at Brown County, WI. The company’s first CNG station came into operation in De Pere, WI in 2012. The new station is located in Green Bay at the site of the Bay Beach Shell area which is close to Interstate 43.

Apart from the launch, Integrys Energy secured two CNG service agreements with Green Bay-based carriers Paper Transport, Inc. and Contract Transport Services. The CNG facility has room for Class 8 semi-trucks with 53-foot trailers and includes two dispensers. The facility is fitted with Integrys’ patented hydraulic intensifier which comes with faster refueling capabilities at rates up to 10 diesel gas equivalents per minute.

The current shale gas boom in the U.S. has widened opportunities for its alternative use. Integrys Energy’s efforts to add 101 Class 8 accessible CNG stations by 2016 across 29 states will help tap the growing trucking business.

CNG’s low-cost and clean burning nature is poised to attract the truck market and will gradually reduce U.S. dependence on oil. Integrys’ bold step to venture into the still nascent CNG market is commendable and will catapult the company’s future growth trajectory. In addition, natural gas consumption by car, trucks and trains will witness gradual demand growth by 2020 in the U.S.

Integrys Energy is also collaborating with other CNG enthusiasts by lending its expertise. Recently, an Integrys serviced CNG station of Waste Connections Inc. (WCN) came online in California. Waste Connections will prove to be an important client for Integrys as it aims to convert 80% of its purchased trucks to run on gas by 2018.

Given the favorable gas fundamentals, Integrys Energy is well placed with a Zacks Rank #2 (Buy). Other U.S. gas producers to make the most of the emerging CNG industry are Apache Corp. (APA) and Chesapeake Energy Corp. (CHK).

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