It's Only Natural
True to vertical-integration model, Kwik Trip embraces CNG, LNG from fleet to supply
Published in CSP Daily News
LA CROSSE, Wis. -- It's only natural that Kwik Trip Inc., renowned for its embrace of a self-sufficient, vertically integrated model, would take that tack as it enters the natural-gas transportation fuel business.
This year, Kwik Trip added the first natural gas vehicles (NGVs) to its current fleet, a range of 20 compressed natural gas (CNG) powered and liquid natural gas (LNG) powered vehicles, including small passenger vehicles up to semis, from several original equipment manufacturers (OEMs).
The retailer chose a selection of different NGVs to help establish its own credentials with the technology, and better understand what its CNG and LNG customers--currently, small and large fleets--would experience.
The fleet was also the first step of Kwik Trip's efforts to jumpstart its local markets' move toward CNG and LNG. The second step: developing the infrastructure, which includes its alternative fuel station in LaCrosse, Wis.--officially unveiled this week--as well as a site in Sturtevant, Wis., this May, and two sites in Oshkosh, Wis., and Rochester, Minn., this fall.
(See Related Content below for previous CSP Daily News coverage; see slideshow again below.)
La Crosse, Wis.-based Kwik Trip operates more than 400 stores in Wisconsin, Minnesota, and Iowa.
"If we leverage that vehicle piece, at the same time as Kwik Trip commits to build the infrastructure, through good promotion and education, we think we can drive the market a little more aggressively and faster than what you'd seen so far within the United States," Chad Hollett, director of transportation and distribution, told CSP Daily News. As of late April, there were nearly 1,000 CNG and 47 LNG fueling sites in the United States, according to the U.S. Department of Energy.
While each Kwik Trip CNG/LNG retail location was selected for its market potential, each also represents a mix of sites and configurations, from new builds to existing small and large locations, to fully validate the equipment and operational side of the natural-gas offer.
Kwik Trip is testing fueling systems from three manufacturers at these first sites, including ANGI Energy Systems and Galileo Natural Gas Technologies on the CNG side, and on the LNG side, Chart Industries. The systems include easily upgradeable, skid-mounted dryers, compressors and storage. Kwik Trip is using its conventional fuel dispensers, outfitted for CNG, inline at the pump with gasoline and diesel, "so the customer gets the same experience they're accustomed to when operating it at dispenser level."
While return on investment "is always priority one," Hollett said Kwik Trip's biggest focus is ensuring that CNG and LNG customers have the same fueling experience as those purchasing gas or diesel.
The local natural-gas utility supplies natural gas for the CNG fueling locations, while "multiple supply sources" are providing the LNG piece.
"Kwik Trip is always trying to leverage our vertical integration model and try to be that solution provider," said Hollett. "Natural gas fit within that mindset and business practice. By being able to be independent of any one entity, it allowed us to focus on taking care of the customer and providing a solution."
Kwik Trip's biggest--and most unanticipated--challenge was the sheer amount of legwork required to get CNG and LNG integrated into its existing accounting, sales and I.T. operational systems. "By bringing natural gas in, it wasn't as easy as bringing a system in, plugging it in and, 'Yeah we're going to sell fuel,'" said Hollett. "We had to go back and evaluate a lot of our operational systems to not only integrate natural gas but also other alternative fuels."
From here, Kwik Trip's first goal is to validate the concepts to ensure they work for customers and the chain. Step two: Once the concepts are validated, company leadership is committed to continue to build and have a functional infrastructure that connects Kwik Trip's markets. The chain would target major traffic corridors and markets with a large NGV fleet base.
"Once that happens, it will make the transition for fleets that much easier, knowing that there is dependable and reliable service stations out there and available," said Hollett.