Stabilis Energy and Flint Hills Resources Launch Venture to Build LNG Liquefaction Facilities Targeting Oilfield Fuel Consumers

BEAUMONT, Texas--(BUSINESS WIRE)--

Stabilis Energy announced today that it has formed a venture with Flint Hills Resources, LLC, a leading refining, chemical and biofuels company and a subsidiary of Koch Industries, to build up to five liquefied natural gas (“LNG”) liquefiers serving oilfield fuel consumers. The new venture will open its first LNG production facility in January 2015. Located in George West, Texas, the facility will produce LNG for high horsepower oilfield fuel applications throughout the Eagle Ford Shale. Planned production capacity is 100,000 gallons per day. Stabilis will begin taking orders for LNG supply immediately.

In addition to announcing its first LNG production facility in the Eagle Ford Shale, the venture is finalizing land procurement in North Dakota and West Texas for facilities that are scheduled to begin production in 2015 and 2016. Other LNG production facilities will be located to meet customer demand and are scheduled to begin production in 2016 and 2017.

“Stabilis is proud to announce our first LNG liquefaction facility as part of a new venture with Flint Hills Resources,” said Casey Crenshaw, President and CEO of Stabilis Energy. “We believe this venture will allow Stabilis to rapidly deploy LNG liquefiers across all of the major oil and gas shale plays in North America. Stabilis will provide our oilfield customers with a reliable source of LNG fuel that will help them reduce operating costs using a reliable domestic fuel source.”

Stabilis will utilize its strong customer relationships and reputation in the North American oilfield sector to lead marketing, transportation and logistics, field services, and plant operations for the venture. Stabilis and Flint Hills will share management committee responsibilities.

“We are pleased to establish this relationship with Stabilis Energy to make America's abundant natural gas resources available to high horsepower engine applications in the oilfield,” said Jeremy Bezdek, managing director of Innovation for Flint Hills Resources. “We are very excited about the first plant location in the Eagle Ford and working with customers who currently supply crude oil to our refinery in nearby Corpus Christi. We look forward to building an industry leading oilfield LNG business with Stabilis over the coming years.”

Stabilis will provide LNG transportation, logistics and field service support through its subsidiary Stabilis LNG Transportation and Field Service. Stabilis is currently working with oilfield customers to plan dual fuel engine conversions. Completion of the Stabilis Eagle Ford liquefier will enhance its ability to supply LNG at competitive prices with maximum reliability.

“Oilfield operators require a high level of service from their suppliers,” added Casey Crenshaw. “We believe our deep understanding of oilfield service needs, along with our dedicated LNG production and distribution resources, will make Stabilis the leading turn-key supplier of LNG to the oilfield market.”

Stabilis Energy has awarded Chart Industries' GTLS wholly-owned subsidiary, Chart Energy & Chemicals, Inc. (“Chart”), a contract to provide its standard C100N liquefaction plant for its Eagle Ford LNG facility. Chart has commenced execution on its contract and will provide technical support during construction and start-up activities. In addition, Stabilis has reserved production slots with Chart for an additional four LNG liquefaction facilities to allow for rapid deployment. These future projects will be able to produce either 100,000 or 250,000 gallons per day.

Stabilis Energy has contracted with San Dimas, Calif.-based hydrocarbon process engineering company OnQuest, Inc., a subsidiary of Primoris Services Corporation PRIM, to begin work on turnkey engineering, procurement and construction services.

About Stabilis Energy

Stabilis Energy is one of the fastest growing suppliers of liquefied natural gas (LNG) to the oilfield sector in North America. Stabilis also serves other end markets including mining, rail, and industrial. Stabilis provides turnkey fuel solutions to help industrial users of diesel and other crude-based fuel products convert to LNG, resulting in reduced fuel costs and improved environmental footprint. Stabilis is vertically integrated from LNG production (beginning January 2015) through distribution and cryogenic equipment rental. Stabilis is headquartered in Beaumont, TX and is privately held.

About Flint Hills Resources

Flint Hills Resources, LLC, through its subsidiaries, is a leading refining, biofuels and chemicals company. Its subsidiaries market products such as gasoline, diesel, jet fuel, ethanol, biodiesel, olefins, polymers and intermediate chemicals, as well as base oils and asphalt. Flint Hills Resources operates ethanol plants in Fairbank, Iowa Falls, Menlo, Shell Rock, and Arthur, Iowa and Fairmont, Nebraska. The plants have a combined annual capacity of 650 million gallons of ethanol.

The refining business operates refineries in Alaska (North Pole), Minnesota (Rosemount) and Texas (Corpus Christi), with a combined crude oil processing capacity of nearly 670,000 barrels per day. The petrochemical business includes production facilities in Illinois, Michigan and Texas. The asphalt business produces and markets product in the Midwest and Alaska. A subsidiary owns an interest in a lubricants base oil facility in Louisiana.