Kinetrex Announces Liquefied Natural Gas Partnership

An Indianapolis company has come to terms on a deal with UPS that is expected to save millions of dollars and reduce its carbon footprint.

Kinetrex Energy – a subsidiary of Citizens Energy Group – will supply about 2 million gallons of liquefied natural gas to fuel UPS tractor trailers in the Midwest every month.

"It's perfect timing.  The timing is driven in significant part because of the drop in the price of natural gas which is 60 percent of what it was six years ago, especially compared to the price of diesel fuel which has been going up," said President and CEO Carey Lykins.  "So, you have a very inexpensive fuel that is also very efficient and very clean.  So, it's the perfect time."

Lykins believes UPS is an ideal partner for the operation.

"Because of their need for clean energy," he said.  "They are a very large company; they are going to buy a lot of liquefied natural gas. We can help make them clean and cost efficient, as well.  So, it's a great partnership."

Lykins says the deal will create jobs, but doesn’t know how many.

Indianapolis Mayor Greg Ballard says the partnership helps reduce the nation’s dependence on foreign oil and shows the city is ready to help shape the nation’s energy future.

"This is what has to change, what's happening here today," he said.  "When we move from oil to natural gas, when we move from oil to electricity, we continue to move that curve down - that demand curve - across the world which then allows the United States to be in a better position strategically."

Kinetrex is investing $14 million at its north side facility and in Beech Grove for the operation. The company says liquefied natural gas costs 40-percent less than diesel and reduces greenhouse gas emissions by 20 percent.

Indiana consumes about $4 billion worth of diesel a year.

"This is an extraordinary collaboration that is a win for Hoosier jobs.  It is a win for our economy.  It is a win for our environment," said Indiana Gov. Mike Pence.  "Today, we really make a statement here in Indiana that we are about promoting (an) all of the above energy solution. That means we call on all of our resources, wind, solar, nuclear, biomass, but also coal and oil and natural gas."