American Electric Technologies reached an agreement with Stabilis Energy to create a small-scale liquefied natural gas (LNG) production and distribution company.
The combined business will include Stabilis’ small-scale LNG production and distribution businesses as well as AETI’s existing international businesses, AETI said in a statement.
At the closing, Stabilis and its units will become AETI companies and the existing AETI shareholders will own 11 percent of the combined company. The former owners of Stabilis will own 89 percent of the combined company.
After closing, James Reddinger, current president and chief executive officer of Stabilis, will serve as president and CEO of the combined company.
Peter Menikoff , chairman and CEO of AETI, said, “We believe the transaction will give the Company a substantial North American LNG business to complement its international operations.”
Demand for natural gas for power generation and heating applications is increasing across multiple end markets, but many of these customers are not directly connected to a pipeline, AETI said.
Stabilis operates its LNG production business under the Stabilis Energy brand name and its LNG distribution business under the Prometheus Energy brand name.
Stabilis’ operating assets include a 120,000 LNG-gallon per day production plant in George West, Texas, a 30,000 LNG-gallon per day production plant that is being relocated to the West Texas region, and a fleet of cryogenic rolling stock equipment that is capable of servicing customers throughout North America.
Following the closing, the combined company will continue to operate AETI’s existing Brazilian unit and Chinese joint venture.
Casey Crenshaw , executive chairman of Stabilis, added, “We believe that small-scale LNG has tremendous growth potential across multiple end markets in North America, and this transaction gives us the opportunity to grow Stabilis’ footprint aggressively in the near future.”
Upon completion of the transaction, the combined company will be renamed Stabilis Energy.