Blu, LNG, was established in the year 2012 as a joint business or venture between CH4 Energy Corp and ENN. The company has constructed approximately twenty-five permanent stations, in which trucks powered with LNG may refuel. Moreover, Blu, LNG is building the infrastructure for the natural gas trucks through developing as well as managing liquefied natural gas (LNG) stations. The company’s truck lease, as well as conversion kit programs, support corporations use the gains of liquefied natural gas. Blu, LNG, anticipates expanding its advantages of natural gas (LNG) to the U.S. The paper discusses and identifies the internal strengths, weaknesses, external opportunities, as well as threats of Blu, LNG.
Strengths of Blu, LNG
LNG (liquefied natural gas) is similar to fuel used within homes across U.S. The fuel goes through process of purification, refrigerated to -2600F, condensing it to liquid as well as reducing LNG’s volume by about 600 times. LNG has a feasible historic shift, which may reduce costs of fuel, environmental pollution, as well as strengthen the merit railroads have over trucks within long-haul shipping. Companies of rail anticipate taking advantage of the natural gas production, which has reduced the prices of fuel by approximately 50 percent. The company intends to do an experiment redesigned engines having capacity to burn liquefied natural gas and diesel (Reuter’s n.d.).
Liquefied natural gas is cheaper in comparison to gasoline. Trucks may save approximately 2 dollars a gallon or even more when using natural gas. The gas is abundant and requires no importation from other countries, hence, reducing expenses that could be incurred for importation. Besides, the liquefied natural gas burns cleaner in comparison to other hydrocarbons. The gas is usually methane that burns to produce water and carbon dioxide (Reuter’s n.d.).
Compressed natural gas (CNG) is widely available in comparison to liquefied natural gas that needs low-temperature storage tanks. However, liquefied natural gas is denser than compressed natural gas, implying that a truck may hold more energy within a 200-gallon liquefied natural gas tank in comparison to what can be held within a 200-gallon compressed natural gas tank. A truck with in-build engine to utilize natural gas has similar performance to gasoline or diesel engine, though with lower fuel expense or cost, as well as less pollution (Yahoo Finance Canada n.d.).
Weaknesses of Blu, LNG
According to information from Department of Energy in U.S., there are about twenty-eight public liquefied natural gas fueling stations within operation in U.S.; most of the liquefied natural gas stations are not in operation, as the firm is awaiting satisfactory market prior to opening the stations (Furumiya et al., 2012). Long-haul truckers are reluctant, because they must be assured of getting fuel along their routes. Before there are adequate liquefied natural gas fueling stations existing within the strategic places, long-haul truckers are still expected to be slow or reluctant to embrace the new fuel, despite its merits.
As the Blu, LNG awaits truckers to adopt and switch to the cleaner-burning and cheap fuel, it was compelled to lay off about 20% of its employees, ousted many senior executive, as well as slowed down establishment of fueling stations (Fleets and Fuels n.d.). Fueling stations require customers, as well as trucks that can use natural gas. Insufficient customer for liquefied natural gas, has made the firm slower in hitting the market as was expected as is still far expensive in comparison to its diesel equivalents, creating even the attraction of cheaper fuel challenging to swallow for numerous fleet owners (Reuter’s n.d.).
Opportunities for Blu, LNG
The company is rolling out strategies to build a network of LNG fueling points for trucks along highways. With programs to establish 50 stations in 2013, the firm joins formidable team of players, including CEFC and RSP, in an aggressive effort to create an infrastructure for trucks fueled through cheap, as well as abundant natural gas.
The plans with Blu LNG anticipate providing fleets the opportunity or chance to guarantee that the fueling infrastructure/capacity has been developed to satisfy their routes and needs. In addition, Blu established programs could help fleets determine whether the price variation between diesel fuels and liquefied natural gas provides enough savings by adopting widespread use of LNG powered trucks in fleet operations.
Blue, LNG offers opportunity to test LNG powered trucks within their specific functions and duties cycles for firms involved within regional food, oil and gas exploration, beverage distribution, finished goods for food processors, and hauling raw materials for the agricultural sector.
Threats for Blu, LNG
There are low customers as well as trucks using natural gas, making the hit market slower than expected. Diesel fuels are still preferred by most customers making natural gas unpopular. Inadequate expansion of LNG fueling networks causes low demand for natural gas, natural gas engines, as well as retrofit kits.
Based on the PEST analysis of Blue LNG, it makes sense for any investor to venture into the expanded use of liquefied natural gas for transportation fuel for innovative and new investment opportunities.
Blu LNG | Fleets and Fuels.com. (n.d.). Retrieved from http://www.fleetsandfuels.com/tag/blu-lng/
Exclusive: Chinese firm puts millions into U.S. natural gas stations| Reuters. (n.d.). Retrieved from http://www.reuters.com/article/2013/03/14/us-enn-lng-usa-idUSBRE92D09Y20130314
Exclusive: Chinese-backed Blu LNG slows down U.S. growth plans - Yahoo Finance Canada. (n.d.). Retrieved from https://ca.finance.yahoo.com/news/exclusive-chinese-backed-blu-lng-slows-down-u-173917111--sector.html
Furumiya, S., Kobayashi, S., Stek, B., Ishibashi, H., Yamagami, T., & Schep, K. (2012). Wobble-address format of the Blu-ray Disc. doi:10.1109/OMODS.2002.1028636