GE Capital Canada has signed a commercial agreement with Shell Canada Products to facilitate the Canadian trucking industry’s adoption of liquefied natural gas, the financial services company announced.
Shell and GE are offering a way to reduce monthly lease payments on LNG trucks as a way to make use of the alternative fuel viable for more fleets.
"For us it's fairly unique," said Veronique Hache strategic initiative leader, natural gas at GE Capital Canada. "It is something out of the ordinary but it speaks to our intention of creating something different in the marketplace and having a different offering than our competition."
Under this new agreement, fleet owners must sign an LNG fueling contract with Shell. Afterward, the fleet will go to a truck manufacturer and get a quote for the vehicle to take to GE for a leasing agreement.
The company says it looks into several factors including fuel consumption of the fleet or particular truck and the finances of the company to determine how much it can reduce monthly costs. The process is designed to make the more expensive LNG trucks more economically comparable to diesel equivalents.
“Through this agreement, we’re giving over-the-road trucking companies the financial incentive to make the shift from diesel to natural gas,” said François Nantel, leader of GE Capital Canada’s transportation business. “Working with Shell will help address truck operators’ concerns regarding the trucks’ value and incremental capital investments and allow them to access the benefits of LNG vehicles from day one.”
LNG is generally used for vehicles that undertake long hauls, while compressed natural gas is used for those that undertake shorter hauls. The timing, range and weight of the fuel all lend themselves to trucks with longer distances to travel.
"The segment will mostly be in the Class 8 heavy-duty sector starting in day cab cabs up to the sleeper tractors," said Hache. "We've seen bigger interest at this point in the private fleet sector."
Shell is currently focusing its LNG fueling infrastructure in Alberta along a major trucking corridor and in Edmunton with a plan in the future to expand from there. Despite lower diesel prices, GE believes that the stability of natural gas prices is a good incentive to get into the LNG market.
"It brings stability to your budget and allows you to be more aggressive on your bidding for contracts," said Heche. "It’s an advantage to get started today."
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