Natural gas headed to more filling stations
Gas-station operators might be persuaded to install this natural-gas option from Chesapeake and GE.
Chesapeake Energy (CHK) and General Electric (GE) have partnered to bring natural-gas fueling to gas stations and convenience stores. This collaboration will combine GE's technology know-how with Chesapeake's expertise in developing fueling solutions.
Chesapeake Energy operates in the natural gas and oil production domain and also owns midstream and other oilfield assets in compression, drilling, trucking and pressure pumping. It competes with Cimarex Energy (XEC) and Linn Energy (LINE) among others in the oil and natural gas segments.
The company plans to provide around 250 natural-gas compression stations called "CNG in a Box" by 2015. The "box" is actually an on-site facility for compressing natural gas coming from a pipeline at a refilling station or industrial location. This will not only help expand access to cleaner and affordable natural gas, but also reduce America's dependence on oil for energy needs.
This will also significantly cut operational costs of natural-gas fueling stations and, hence, improve EBITDA margin for Chesapeake's midstream division.
Natural-gas prices have dipped lately on account of a dramatic increase in shale gas resources. The collaboration with GE could persuade operators to install more fueling stations. This will boost Chesapeake's midstream operations, which include marketing, gathering and compression, that account for around 2% of Chesapeake's $35 Trefis price estimate.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Investors remain jittery as they await the central bank's policy decision and Chairman Bernanke's press conference.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.