USA: Blue Energy Acquires TXU Gas Company's Alternative Fuels Division

By Press Release | 26 September 2000

Armed with a seasoned executive team, significant financial resources and strategic positioning in several key markets, Blue Energy & Technologies LLC, a new, multi-dimensional natural gas vehicle (NGV) company, has acquired the Alternative Fuels Division of TXU Gas Company, formerly Lone Star Energy, for an undisclosed sum. The transaction, which formally closed July 31, 2000, includes a network of 20 public natural gas fueling stations and related primarily operations in the Dallas - Ft. Worth area.

Founded in 1991 as Lone Star Energy, the company became a division of TXU Gas following the 1998 merger of Enserch Corporation and TXU Corp. Blue Energy has renamed the company TranStar Energy Company L.P. and will operate it as one of its three subsidiaries.

Blue Energy recently completed a private placement of $10.5 million in equity from investors that include Perseus 2000 and natural gas vehicle industry organizations Gas Technology Institute and GFI Control Systems. Some of those funds were used in Blue Energy's September 15, 2000, acquisition of Natural Fuels Company LLC from Public Service Co. of Colorado (PSCO) and to create Blue Fuels Group L.P., a Blue Energy subsidiary that provides NGV services nationally.

Blue Energy's founder and President/CEO is Paul A. Nelson, a former executive at Natural Fuels Company LLC. Jim Moore, former general manager of Lone Star Energy, will head up the TranStar operation and Stan Taylor, another former Lone Star Energy executive, will oversee the activities of Blue Fuels Group.

"Organizations like the City of Dallas, DART and Dallas/Ft. Worth International Airport have made a strong commitment to the advantages of clean-burning natural gas vehicles in their fleets," said Nelson, "The acquisition of TXU's Alternative Fuels Division by Blue Energy creates an environment where the entire focus of the company is on satisfying the requirements of existing and potential natural gas vehicle customers."

TranStar Energy is well positioned to meet the growing demand for alternatives to gasoline and diesel vehicle fuels. The purchase of TXU's Alternative Fuels Division by Blue Energy follows a national trend in which independent alternative fuels companies like Blue Energy have emerged to lead local market development efforts.

"Although TXU Gas Co. has long been interested in promoting clean burning natural gas -- and the use of natural gas vehicles -- the time is right for us to sell our alternative fuels division," said Grant Whitt, general manager of TXU's Alternative Fuels Division. "We think that in Blue Energy we have found a buyer that will build the market for the benefit of our customers. TXU itself operates a fleet of natural gas vehicles and looks forward to its' relationship with Blue Energy as both a customer, supplier and business partner."

Blue Energy also has an alliance with PSCO to further develop the NGV market in Denver, Colorado, an area that also shows significant potential for increased use of natural gas as a transportation fuel. Besides growing existing markets in Texas and Colorado, the company plans to aggressively pursue diversification opportunities in other geographic regions with strong growth potential through strategic partnerships and/or additional acquisitions.