ETA provided technical and financial due diligence services to an infrastructure fund as part of their 2021 acquisition of Xpress Natural Gas (XNG), a fully-integrated, compressed natural gas (CNG) transportation company which provides a “virtual pipeline” to commercial, industrial, and utility customers in nine U.S. states and two Canadian provinces that are in gas supply constrained areas, or areas lacking adequate pipeline connectivity. XNG also provides pipeline to pipeline CNG transportation services when seasonal gas pricing differentials exceed the cost to transport CNG between different gas supply areas.
ETA’s independent engineering evaluation commenced with the preparation of a detailed request for information, a review of the detailed asset/operational information supplied into the virtual data room, and an independent verification of the company’s environmental and regulatory compliance. ETA’s assessment also included physical asset inspections at two of the key compression, injection, fueling, and fleet maintenance stations.
On the technical side, ETA’s activities including a detailed review of the project design and asset condition for the compression and injection stations, the decompression skids placed at the customer sites, and the transportation fleet, as well as an assessment of operations and maintenance practices/records for all assets. Detailed logistics modeling was also undertaken to verify that the fueling stations and the tractor/CNG trailer fleet capacities were sufficient to handle all contractual obligations during extreme, winter peak demand conditions. Additional areas of review included fleet scheduling, metering, natural gas pipeline supply and interconnections, operational safety and security policies/performance, and environmental and regulatory permitting requirements and compliance.
On the financial side, ETA reviewed the acquisition financial model and provided inputs and validated key fleet and station operating expenses, as well as performed detailed support modeling for fleet expansions, tractor replacements and CNG trailer recertifications and long term replacements.