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January 30, 2013 | last updated January 30, 2013 11:38 am

Dead River, XNG target commercial natural gas market

The Boston-based Xpress Natural Gas expects to displace 30 million gallons of heating oil or propane in Maine markets with trucked-in natural gas by the end of 2013, working with Bangor-based Dead River Co.

Through a new partnership announced today, the company's leaders say they're planning to expand the customer base for compressed natural gas from large industrial clients — like the Lincoln and Madison paper mills — to commercial clients like Aroostook Medical Center in Presque Isle, colleges and other similarly sized entities, a market they estimate consumes around 100 million gallons in the region.

"Historically, XNG has focused on the large industrial market, the big paper mills, and we frankly got overwhelmed with the number of commercial customers that were interested in converting," John Nahill, XNG's president and CEO, told Mainebiz. "It became clear that we needed a partner that knew that market and how to service that market."

Within the next week, Nahill says the company will put its Baileyville terminal in operation, which will be the primary distribution hub for the trucked CNG through 2013.

With the new partnership, Nahill says XNG will provide the supply and technology for the new service and Dead River will provide transportation logistics, marketing and distribution that it currently uses to serve its customers using heating oil and propane.

Dead River CEO Bob Moore says a changing energy landscape will make such partnerships more common, as providers of existing heating fuels stand to face challenges from providers of the lower-priced natural gas in the coming years.

"Natural gas is a very new energy source in the state of Maine," Moore says. "For a company to get into a new area, it feels more comfortable being there with a partner who has started in it."

With natural gas prices lower than other fuel sources, Nahill says the start of truck-delivered natural gas to commercial customers will open a market that would otherwise wait for an accessible pipeline.

Beyond Baileyville, Nahill says XNG plans to build out another distribution facility at the end of the year with a third to follow soon after.

Nahill declined to say where each of those CNG terminals would be located, but did say they would provide access to central Maine and western New England, to serve clients in New Hampshire and Vermont.

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