Questar Arm Plans 2nd CNG Unit in Texas - Analyst Blog

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Natural gas focused company, Questar Corporation ( STR ) reported that its affiliate Questar Fueling Company is planning to construct a compressed natural gas (CNG) fueling station in San Antonio, Texas. Questar expects the facility to be online by this summer. This station is going to be the second CNG fueling facility in Texas as the company has already opened its first unit in Houston, Texas last year.

The facility is expected to serve Central Freight Lines operated 60 class-8 natural gas-powered trucks. In addition, it will support other trucking fleet and public vehicles running on CNG. Every year, Central Freight Lines is believed to consume over 1 million diesel-gallon equivalents of natural gas.   

The trucking industry is now switching to CNG, as it is environment friendly and cheaper than petrol or diesel. Hence, Questar expects its second CNG fueling station to generate significant cash flows for shareholders.

Founded in 1922, Salt Lake City, Utah-based Questar Corporation has three principal subsidiaries - Wexpro Company, Questar Pipeline and Questar Gas Company. In Jun 2010, Questar completed the spin-off of its unregulated exploration and production business as well as its gas gathering and marketing segment into a separate, independent and publicly traded company, QEP Resources Inc. ( QEP ).

Questar, after the QEP Resources spin-off, has transformed itself into a natural gas-operated energy company, which focuses exclusively on exploring natural gas resources while serving customers domestically and worldwide. The company is expected to perform well in the coming quarters given its focused and experienced managerial team, manageable debt maturities and long-term contracts.

Questar currently carries a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.

One can also consider other players in the utility gas distribution sector like Atmos Energy Corporation ( ATO ) and MDU Resources Group Inc. ( MDU ). Both the stocks sport a Zacks Rank #2.



ATMOS ENERGY CP (ATO): Free Stock Analysis Report

MDU RESOURCES (MDU): Free Stock Analysis Report

QEP RESOURCES (QEP): Free Stock Analysis Report

QUESTAR (STR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ATO , MDU , QEP , STR

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