OnCue Express

Alamo Area NGV Coalition:
The Case for CNG Retail Operations
OnCue Express
September 20, 2012
• Why do you care about alternative fuels?
• What has motivated you to invest your time at this
conference?
WHO WE ARE:
OnCue Express
•
•
•
•
13 CNG Locations
40 Convenience Stores
550 Employees
Growing 3-5 C-Stores/CNG per year
PUBLIC CNG STATIONS OPENING SOON!
Convert Your Fleet Today - $1.39/Gallon
CLEAN. ABUNDANT. AFFORDABLE. OKLAHOMAN
11 New Public CNG Stations in Operating Areas
To Open By Year End 2010
70 Total OK Public CNG Stations
ARKOMA
ON-CUE EXPRESS AT CHESAPEAKE’S FIELD OFFICE
4417 Main Street
Arkoma, OK 74901
KINGFISHER
LOVE’S COUNTRY STORE #5
203 S Main
Kingfisher, OK 73750
EDMOND
ON-CUE EXPRESS #105
800 S. Broadway
Edmond, OK 73034
LINDSAY
ON-CUE EXPRESS AT CHESAPEAKE’S FIELD OFFICE
1407 S. E. 4th Street
Lindsay, OK 73052
ELK CITY
HUTCH’S C-STORE
515 South Main Street
Elk City, OK 73644
OKLAHOMA CITY
ON-CUE EXPRESS #100
5900 W. Reno
Oklahoma City, OK 73127
EL RENO
ON-CUE EXPRESS AT NOMAC’S FIELD OFFICE
3401 S. Radio Road
El Reno, OK 73036
OKLAHOMA CITY
ON-CUE EXPRESS #101
1 NW 23rd Street
Oklahoma City, OK 73013
WAYNOKA
ON-CUE EXPRESS AT CHESAPEAKE’S FIELD
OFFICE
32744 State Highway 45
Waynoka, OK 73860
WEATHERFORD
ON-CUE EXPRESS AT CHESAPEAKE’S FIELD
OFFICE
2020 Eagle Road
Weatherford, OK 73096
WILBURTON
ON-CUE EXPRESS AT CHESAPEAKE’S FIELD
OFFICE
4980 Highway 270 West
Wilburton, OK 74578
Partnership With Chesapeake Energy (2011):
11 Compressed Natural Gas Vehicle Stations Across Oklahoma
OnCue Express
Foundational Questions
• What’s in it for you?
• Would you benefit by a stable cost of fuel?
• Would you like to have more money for programs rather than for
transportation costs?
• Would you benefit by a cleaner fuel that gas or diesel?
• Would you prefer to support American jobs, businesses, and industry?
• Would you like to reduce or eliminate our dependence on foreign oil?
How A System Works?
Dispenser
Buffer System
Priority Panel
Compressor
Inlet Dryer
America on the Bottle
•
U.S. consumes 23% of the world’s
petroleum
•
By 2020, the IEA predicts world oil
consumption will increase 60%


•
This does not take production
decreases into account
This means we will need 4 more Saudi
Arabias… Where will they be?
To keep pace with demand and
depletion, the world must add 64
million barrels of production per day
until 2020:

This growth will require $350 billion
per year on new projects

OPEC only spent $390 billion in total
on new projects from 2000-2007
Global Competition Increasing
2009 to 2015E
CHINA
• 2.2 up to 10.1 Bbl/Person
INDIA
• 0.9 up to 5.4 Bbl/Person
Chinese vehicle ownership per
capita is equal to where the
U.S. was in 1925
Pickup – Break Even Analysis
•
Ford F-250
 16 mpg – 24,000 miles per year
 1,500 GGE/year
 Cost Premium: $9,000
 Increased Resale: $4,500
 Bi-Fuel CNG/Gasoline
•
At Fuel Differential of $1.50
 Simple payback in 4 years
 Net Life Cycle Savings: $4,500
 100,000 mile turnover target
Fleet Fuel Savings
FLEET SAVINGS USING CNG IN OKLAHOMA
(May vary for other fleets depending on location and other factors)
1/2 TON
1/2 TON
TRASH
CITY
TRACTOR
PICKUP
PICKUP
TRUCK
BUS
TRAILER
CNG CONVERSION COSTS
TAX CREDIT PERCENTAGE
NET COST OF CNG CONVERSION
$
9,000 $
50%
4,500 $
9,000 $
50%
4,500 $
80,000 $
50%
40,000 $
60,000 $
50%
30,000 $
20
40
200
200
$ 3.75
$ 1.35
$ 2.40 $
2.40 $
2.40 $
2.40 $
2.40 $
2.40
WEEKLY SAVINGS USING CNG
$
48 $
96 $
480 $
480 $
1,200
ANNUAL SAVINGS USING CNG
$
2,496 $
4,992 $
24,960 $
24,960 $
62,400
21.6
10.8
19.2
14.4
4,500 $
4,500 $
25,000 $
4,500 $
$
WEEKLY FUEL CONSUMPTION
GASOLINE PRICE
CNG PRICE
PRICE DIFFERENTIAL
MONTHS TO RECOVER
CONVERSION COSTS
INCREASED VEHICLE RESALE
VALUE OF CNG
$
80,000
50%
40,000
500
7.7
4,500
Commodity and Pump Price
EFFECT OF NATURAL GAS PRICES ON CNG
Natural Gas-Platt's 1st Daily (per Dekatherm)
2.0000
3.0000
4.0000
5.0000
6.0000
7.0000
8.0000
Reseller Margin
0.1500
0.1500
0.1500
0.1500
0.1500
0.1500
0.1500
ONG Transportation Fees
0.4574
0.4574
0.4574
0.4574
0.4574
0.4574
0.4574
2.6074
3.6074
4.6074
5.6074
6.6074
7.6074
8.6074
Divided by 8 Equivalent Gallons per Dekatherm
0.3259
0.4509
0.5759
0.7009
0.8259
0.9509
1.0759
Plus F.E.T.
0.1830
0.1830
0.1830
0.1830
0.1830
0.1830
0.1830
Plus Okla Motor Fuel Tax
0.0500
0.0500
0.0500
0.0500
0.0500
0.0500
0.0500
Line Loss + BTU Conv Loss
0.0168
0.0205
0.0243
0.0280
0.0318
0.0355
0.0393
Total Cost of CNG per Gallon
0.5757
0.7044
0.8332
0.9619
1.0907
1.2194
1.3482
Repairs & Maintenance Average Expense
0.1800
0.1800
0.1800
0.1900
0.2000
0.2100
0.2200
Electric Chg & Upcharge for Peak Season
0.1000
0.1000
0.1000
0.1100
0.1200
0.1300
0.1400
Total Cost per Dekatherm
CNG Pricing Fundamentals
JULY 2012 COSTS
OKC
ARKOMA
EL RENO
W-FORD
WILBUR.
Natural Gas-Platt's 1st Daily (per Dekatherm)
2.4950
2.8958
2.4950
2.4950
2.4950
2.4850
2.4850
Reseller Margin
0.1500
0.1700
0.1500
0.1500
0.1500
0.1500
0.1500
ONG Transportation Fees
0.4574
3.4710
0.4574
0.4574
0.4574
2.0350
2.0350
3.1024
6.5368
3.1024
3.1024
3.1024
4.6700
4.6700
Divided by 8 Equivalent Gallons per Dekatherm
0.3878
0.8171
0.3878
0.3878
0.3878
0.5838
0.5838
Plus F.E.T.
0.1830
0.1830
0.1830
0.1830
0.1830
0.1830
0.1830
Plus Okla Motor Fuel Tax
0.0500
0.0500
0.0500
0.0500
0.0500
0.0500
0.0500
Line Loss + BTU Conv Loss
0.0186
0.0315
0.0186
0.0186
0.0186
0.0245
0.0245
0.6394
1.0816
0.6394
0.6394
0.6394
0.8413
0.8413
Repairs & Maintenance Average Expense
0.1800
0.4600
0.3000
0.1900
0.1200
0.4300
0.3600
Electric Chg & Upcharge for Peak Season
0.1000
0.1400
0.1100
0.0900
0.1000
0.1400
0.2300
Total Cost per Dekatherm
LINDSAY WAYNOKA
Electric Chg & Upcharge for Peak Season
Total Cost of CNG per Gallon
Pricing principles
CNG (January 2012)
Retail Price: $1.85/gge
Taxes
Marketing & Profit
Distribution & Compression
Natural Gas
13%
40%
27%
20%
CNG Sales Profitability is the key driver
for infrastructure development
On September 7, 2012 the NYMEX spot price for natural gas closed at $2.73/MMBtu.
These low commodity prices are an advantage for CNG retail profit margins.
Pump price of $1.99/gge
Pump price of $2.45/gge
INPUT
COST
INPUT
COST
Natural Gas (divide by 8.0)
$0.34
Natural Gas (divide by 8.0)
$0.34
Transport Costs & Fees
$0.25
Transport Costs & Fees
$0.25
Electricity Costs per GGE
$0.15
Electricity Costs per GGE
$0.15
Maintenance per GGE
$0.26
Maintenance per GGE
$0.26
Federal and State Taxes
$0.25
Federal and State Taxes
$0.25
Fuel Card Fees per GGE
$0.06
Fuel Card Fees per GGE
$0.07
Retailer Profit Margin
$0.68
Retailer Profit Margin
$1.13
CNG at the Pump
$1.99
CNG at the Pump
$2.45
Corporate Information
OnCue Express
Headquarters:
916 N Main Street
Stillwater, OK 74075
Contact Information:
Steve James, CFO
[email protected]