UPS to Invest Additional $50 Million in LNG Fueling Stations

In a press release today, UPS (NYSE: UPS  ) announced that it would be investing an additional $50 million to create nine new liquefied natural gas (LNG) fueling stations across the United States. This follows an April announcement that it would purchase 700 LNG-fueled tractors and build four fueling stations for $18 million. 

UPS currently operates LNG tractors in Las Vegas; Phoenix; Beaver, and Salt Lake City, Utah; and, Ontario, Calif. It is currently constructing facilities in Knoxville, Nashville, Memphis, and Dallas. The facilities announced today will be located in Florida, Illinois, Indiana, Mississippi, Missouri, Ohio, Pennsylvania, and Texas. In all, UPS plans that the 13 new LNG fueling stations will be up and running by the end of 2014.

UPS noted that the addition of the LNG stations and fleet of tractors will eliminate its need for 24 million gallons of diesel fuel annually. In 2012, UPS's entire alternative fuels fleet, which encompasses 2,700 vehicles powered by all-electric, hybrid, LNG, compressed natural gas, and other fueling sources, drove 49 million miles. That was 43% above 2011 levels. In total, its alternative fuel and advanced technology vehicles drove 295 million miles from 2000 to 2012 and the company noted its goal was to reach 1 billion miles by 2017.

UPS Chief Operating Office David Abney said in the press release, "The natural gas industry needs companies to commit to using natural gas to help establish a reliable alternative to traditional fuel, and that is just what UPS is doing. The UPS strategy is both environmentally friendly and economically viable." He also highlighted the growing supply of natural gas, and its less volatile nature when compared to diesel fuel.

The company also highlighted it "has used LNG vehicles for more than a decade and has benefited from lower fuel prices compared to imported petroleum." In addition it notes LNG is generally priced 30%-40% lower than petroleum and it provides 25% less CO2 emissions.

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