Sapphire acquires Spectrum LNG assets in Arizona, Oklahoma

Spectrum LNG’s Desert Gas plant in Ehrenberg, Arizona. Sapphire Gas Solutions has acquired Spectrum’s assets in Ehrenberg and a site for future expansion in Stroud, Oklahoma. (Image: Spectrum LNG)

Sapphire Gas Solutions has acquired Spectrum LNG assets in Arizona and Oklahoma, adding approximately 76,000 gallons per day of operational LNG production capacity to its growing distributed natural gas business.

The transaction includes Spectrum’s operating Desert Gas LNG Plant in Ehrenberg, Arizona, near the California border, as well as a site in Stroud, Oklahoma, that Sapphire said provides an opportunity for future expansion.

The Desert Gas facility has approximately 100,000 gallons of LNG storage capacity in addition to its 76,000-gallon-per-day production capacity. The plant receives feed and fuel gas from TC Energy’s North Baja pipeline and supplies LNG to municipal, commercial and industrial customers in the region.

Sapphire said the acquisition will expand its ability to supply customers in the Southwest and Southern California while giving the company greater control over LNG production, transportation and delivery.

“Spectrum gives Sapphire an established LNG production base in the Southwest at a time when demand for reliable, flexible natural gas continues to grow,” Sapphire CEO Sam Thigpen said. “The Desert Gas facility further advances our vertically integrated model allowing Sapphire to provide customers with a more complete and unified service.”

LNG platform continues to expand

The Spectrum transaction follows Sapphire’s acquisition of EDGE LNG and continues the company’s effort to develop a vertically integrated merchant LNG platform.

Spectrum has increased LNG deliveries to customers by more than 15% annually since 2021, according to Sapphire.

The Arizona acquisition is particularly significant for Sapphire because it adds production infrastructure to the company’s existing mobile natural gas and distributed energy operations in the region. Sapphire provides CNG, LNG and RNG services and operates across 30 states.

“The Southwest U.S. and Southern California are important markets for Sapphire, and Spectrum gives us the ability to serve it with greater scale and flexibility,” Thigpen said. “Vertical integration allows Sapphire to control the molecule from production through transportation to the end customer.”

The acquisition also adds the Stroud site to Sapphire’s portfolio, although the company did not disclose the site’s planned LNG production capacity, development schedule or anticipated investment.

Equipment details not disclosed

Sapphire did not identify the liquefaction technology, compression equipment or drivers operating at the Desert Gas facility. The company also did not disclose whether it plans to expand or modify the existing plant following the acquisition.

Spectrum CEO Ray Latchem said the transaction comes as Spectrum expands its operations in Alaska. Sapphire has been a customer of Spectrum for several years, he said.

The acquisition follows Sapphire’s recent purchase of EDGE LNG, which expanded its LNG production capabilities, and a strategic partnership announced earlier this year with infrastructure investment firm Antin Infrastructure Partners.

Financial terms of the Spectrum transaction were not disclosed.