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What changed in Stabilis Solutions, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Stabilis Solutions, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+299 added−75 removedSource: 10-K (2024-03-07) vs 10-K (2023-03-09)

Top changes in Stabilis Solutions, Inc.'s 2023 10-K

299 paragraphs added · 75 removed · 65 edited across 3 sections

Item 1. Business

Business — how the company describes what it does

59 edited+233 added−10 removed41 unchanged
Biggest changeWe make the determination of LNG and transportation supply sources based on the cost of LNG, the transportation cost to deliver to regional customer locations, and the reliability of the supply source. Transportation and Logistics Services —Stabilis offers its customers a “virtual natural gas pipeline” by providing turnkey LNG transportation and logistics services in North America.
Biggest changeTransportation and Logistics Services —Stabilis offers our customers a “virtual natural gas pipeline” by providing turnkey LNG transportation and logistics services in North America. We deliver LNG to our customers’ work sites from both our own production facilities and our network of approximately 30 third-party production sources located throughout North America.
Our Industry LNG can be used to deliver natural gas to locations where pipeline service is unavailable, has been interrupted, or needs to be supplemented. LNG can also be used to replace a variety of alternative fuels, including distillate fuel oil and propane, among others, to provide environmental and economic benefits.
Our Industry LNG can be used to replace a variety of alternative fuels, including distillate fuel oil and propane, among others, to provide environmental and economic benefits. LNG can also be used to deliver natural gas to locations where pipeline service is unavailable, has been interrupted, or needs to be supplemented.
In addition, LNG fuel tanks and systems used in natural gas applications are subjected to a number of federal and state required safety tests, such as fire, environmental hazard, burst pressure and crash testing that ensure their safety. Established LNG Production and Distribution Technology.
In addition, LNG fuel tanks and systems used in natural gas applications are subjected to a number of required federal and state safety tests, such as fire, environmental hazard, burst pressure and crash testing that ensure their safety. Established LNG Production and Distribution Technology.
Federal and state safety standards require that LNG is moved by qualified drivers in cryogenic containers designed for LNG transportation. Drivers are subject to U.S. Department of Transportation (“USDOT”) regulations, such as Federal Motor Carrier Safety Administration (“FMCSA”), Hazardous Materials Regulations, and state certification requirements, such as certifications by the Alternative Energy Division of the Railroad Commission of Texas.
International, federal and state safety standards require that LNG is moved by qualified drivers in cryogenic containers designed for LNG transportation. Drivers are subject to U.S. Department of Transportation (“USDOT”) regulations, such as Federal Motor Carrier Safety Administration (“FMCSA”), Hazardous Materials Regulations, and state certification requirements, such as certifications by the Alternative Energy Division of the Railroad Commission of Texas.
LNG is also an important partner fuel for renewables such as solar and wind power 7 and will be a key component of the energy transition to more sustainable sources of energy. We also believe that the combination of cost and environmental benefits makes LNG a compelling fuel source for many energy consumers.
LNG is also an important partner fuel for renewables such as solar and wind power and will be a key component of the energy transition to more sustainable sources of energy. We also believe that the combination of cost and environmental benefits makes LNG a compelling fuel source for many energy consumers.
Stabilis offers our customers a comprehensive off-pipeline natural gas solution by providing the supply infrastructure, transportation and logistics, and field service support necessary to deliver LNG to them in a program that is tailored to their consumption needs. We believe we own one of the largest fleets of cryogenic transportation, storage, and vaporization equipment in North America.
Stabilis offers our customers a comprehensive off-pipeline natural gas solution by providing the supply infrastructure, transportation and logistics, and field service support necessary to deliver LNG to them in a program that is tailored to their consumption needs. We believe we own one of the largest fleets of small-scale cryogenic transportation, storage, and vaporization equipment in North America.
To build and operate LNG liquefaction plants, Stabilis must apply for facility permits or licenses that address many factors, including storm water and wastewater discharges, waste handling, and air emissions related to production activities and equipment operation. The construction of LNG plants must also be approved by local planning boards and fire departments. Transportation of LNG.
To build and operate LNG liquefaction plants, Stabilis must apply for facility permits or licenses that address many factors, including building codes, storm water and wastewater discharges, waste handling, and air emissions related to production activities and equipment operation. The construction of LNG plants must also be approved by local planning boards and fire departments. Transportation of LNG.
The last patent to expire in the U.S. will expire in July 2038, absent any adjustments or extensions. The Company has ten U.S. trademark registrations and one foreign trademark registration (Canada). The Company has no pending trademark applications. Available Information Stabilis’ principal executive office is located at 11750 Katy Freeway, Suite 900, Houston, Texas 77079.
The last patent to expire in the U.S. will expire in July 2039, absent any adjustments or extensions. The Company has ten U.S. trademark registrations and one foreign trademark registration (Canada). The Company has no pending trademark applications. Available Information Stabilis’ principal executive office is located at 11750 Katy Freeway, Suite 900, Houston, Texas 77079.
We believe these customer markets are well suited to use LNG because they consume relatively high volumes of fuel, operate in mobile, temporary or off-pipeline locations, have limited access to alternative fuel sources, and/or are facing increasingly stringent emissions or other environmental requirements. We currently serve approximately 50 customers.
We believe these customer markets are well suited to use LNG because they consume relatively high volumes of fuel, operate in mobile, temporary or off-pipeline locations, have limited access to alternative fuel sources, and/or are facing increasingly stringent emissions or other environmental requirements. We currently serve approximately 40 customers.
Seasonality We did not experience significant seasonal variations in volume of LNG delivered to our customers during 2022, and we do not expect future volumes to be significantly impacted by seasonal variations. However, our revenues are susceptible to variations due to changes in the price of natural gas as we pass this cost onto our customer.
Seasonality We did not experience significant seasonal variations in volume of LNG delivered to our customers during 2023, and we do not expect future volumes to be significantly impacted by seasonal variations. However, our revenues are susceptible to variations due to changes in the price of natural gas as we pass this cost onto our customer.
Lower Emissions than Alternative Fossil Fuels. Natural gas contains less carbon than most other fossil fuels and, as a result, produces fewer carbon dioxide emissions when burned. The National Energy Technology Laboratory indicates that new natural gas power plants emit between 50% and 60% less carbon dioxide compared with emissions from a typical coal plant.
Natural gas contains less carbon than most other fossil fuels and, as a result, produces fewer carbon dioxide emissions when burned. The National Energy Technology Laboratory indicates that new natural gas power plants emit between 50% and 60% less carbon dioxide compared with emissions from a typical coal plant.
The Aerospace industry utilizes LNG as a propellant for rocket propulsion systems and LNG provides an economical, clean burning, and easily stored fuel for rockets engines. Aerospace firms may also utilize LNG for power generation at remote facilities. Consumption of LNG at aerospace facilities vary significantly by project type. 6 Agriculture.
The Aerospace industry utilizes LNG as a propellant for rocket propulsion systems and LNG provides an economical, clean burning, and easily stored fuel for rocket engines. Aerospace firms may also utilize LNG for power generation at remote facilities. Consumption of LNG at aerospace facilities vary significantly by project type. Agriculture.
We believe the relative environmental benefits of natural gas as a fuel is becoming increasingly important as our customers expand their corporate sustainability mandates to lower greenhouse gas emissions and increase decarbonization initiatives. Less Expensive than Other Traditional Fuels.
We believe the relative environmental benefits of natural gas as a fuel are becoming increasingly important as our customers expand their corporate sustainability mandates to lower greenhouse gas emissions and increase decarbonization initiatives. Less Expensive than Other Traditional Fuels.
For this reason, the Company’s benefits include medical, dental, and vision and insurance, short- and long-term disability insurance, accidental death and disability insurance, travel and accident insurance, as well as a 401(k) contribution retirement plan.
For this reason, the Company’s benefits include insurance programs for medical, dental, vision, short- and long-term disability, accidental death and disability, and accident, as well as a 401(k) contribution retirement plan.
We believe LNG is optimal for these applications because it is cost-effective with stable pricing, offers consistent supply without curtailments, provides an energy density that minimizes storage requirements, and has a clean and consistent burn that makes heating operations more predictable.
We believe LNG is optimal for these applications because it is cost-effective with stable pricing, offers consistent supply without curtailments, provides an energy density that minimizes storage requirements, and has a clean and consistent burn that makes heating operations more predictable. Marine Bunkering of LNG .
Our experience includes building and operating LNG production facilities, delivering LNG from third-party sources to our customers, and designing and executing a wide-variety of turnkey LNG fueling solutions for our customers using our cryogenic equipment fleet supported by our field service team.
Our experience includes building and operating LNG production facilities, delivering LNG from third-party sources to our customers, and designing and executing a wide-variety of turnkey LNG fueling solutions for our customers using our cryogenic equipment fleet supported by our engineers and field service teams.
Cryogenic Equipment Rental —Stabilis operates a fleet of approximately 205 mobile LNG storage and vaporization assets, including: transportation trailers, electric and gas-fired vaporizers, ambient vaporizers, storage tanks, and mobile vehicle fuelers. We also own several stationary storage and regasification assets. We believe this is one of the largest fleets of small-scale LNG equipment in North America.
Cryogenic Equipment Rental —Stabilis operates a fleet in excess of 150 mobile LNG storage and vaporization assets, including: transportation trailers, electric and gas-fired vaporizers, ambient vaporizers, storage tanks, and mobile vehicle fuelers. We also own several stationary storage and regasification assets. We believe this is one of the largest fleets of small-scale LNG equipment in North America.
Through our 40% interest in BOMAY, we provide power and control systems for the land drilling and production market in China. Competitive Strengths Stabilis believes that we are well positioned to execute our business strategies based on the following competitive strengths: LNG is an economically and environmentally attractive product.
Through our 40% interest in BOMAY, we provide power and control systems for the energy market in China. Competitive Strengths Stabilis believes that we are well positioned to execute our business strategies based on the following competitive strengths: LNG is an economically and environmentally attractive product.
We believe that LNG as well as other clean energy solutions will provide an important balance between environmental sustainability, security and accessibility, and economic viability when compared to both renewables and other traditional hydrocarbon-based fuels and will play a key role in the energy transition.
We believe that LNG will provide an important balance between environmental sustainability, security and accessibility, and economic viability when compared to both renewables and other traditional hydrocarbon-based fuels and will play a key role in the energy transition.
The Company depends on all of its employees, including its executive officers and senior management, to successfully operate its businesses and to successfully execute its strategy going forward. As of December 31, 2022, Stabilis had 100 employees, 99 of whom were full-time employees. We believe our relations with employees are satisfactory.
The Company depends on all of its employees, including its executive officers and senior management, to successfully operate its businesses and to successfully execute its strategy going forward. As of December 31, 2023, Stabilis had 104 employees, all of whom were full-time employees. We believe our relations with employees are satisfactory.
We have safely delivered over 420 million gallons of LNG through more than 43,000 truck deliveries during our 18-year operating history, which we believe makes us one of the largest and most experienced small-scale LNG providers in North America.
We have safely delivered over 470 million gallons of LNG through more than 49,000 truck deliveries during our 20 year operating history, which we believe makes us one of the largest and most experienced small-scale LNG providers in North America.
We define “small-scale” LNG production to include liquefiers that produce less than 1.0 million LNG gallons per day and “small-scale” LNG distribution to include distribution by trailer or tank container up to 10,000 LNG gallons or marine vessels that carry less than 8.0 million LNG gallons (30,000 cubic meters of LNG).
We define “small-scale” LNG production to include liquefiers that produce less than 1.7 million LNG gallons per day (or approximately 1.0 million tonnes per annum ("MTPA")) and “small-scale” LNG distribution to include distribution by trailer or tank container up to 10,000 LNG gallons or marine vessels that carry less than 8.0 million LNG gallons (approximately 30,000 cubic meters).
We believe that we can leverage this proven LNG execution experience to grow our business in existing markets and expand our business into new markets. Comprehensive provider of “virtual natural gas pipeline” solutions throughout North America.
We believe that we can leverage this proven LNG execution experience to grow our business in existing markets and expand our business into new markets. Comprehensive provider of “ virtual natural gas pipeline ” solutions throughout North America.
We have experience serving customers in multiple end markets including aerospace, industrial, utilities and pipelines, mining, energy, remote clean power, and transportation. We also have experience exporting LNG to Mexico and Canada. Finally, we believe our team is among the most experienced in the small-scale LNG industry.
We have experience serving customers in multiple end markets including aerospace, agriculture, energy, industrial, marine bunkering, mining, pipeline, remote power and utilities. We also have experience exporting LNG to Mexico and Canada. Finally, we believe our team is among the most experienced in the small-scale LNG industry.
Additionally, liquefied methane is increasingly becoming the fuel of choice for reusable rocket propulsion systems due to its higher energy density, reduced risk of explosion and ease and cost to produce. The commercial satellite industry is expected to drive a significant increase in launches and demand for liquid methane in the form of LNG to support this growth.
Additionally, LNG is increasingly becoming the fuel of choice for reusable rocket propulsion systems due to its higher energy density, reduced risk of explosion and ease and cost to produce. The commercial satellite industry is expected to drive a significant increase in launches and demand for LNG to support this growth. Lower Emissions than Alternative Fossil Fuels.
We have also expanded our industry coverage to include multiple new end markets and customers. We accomplished this expansion into new markets by leveraging our LNG production and distribution expertise, in combination with our cryogenic engineering and project development capabilities, to meet new customer needs.
We have also expanded our industry coverage to include multiple new end markets and customers. We accomplished this expansion into new markets by leveraging our LNG production and distribution expertise, in combination with our cryogenic engineering and project development capabilities, to meet new customer needs. Competition The market for LNG is highly competitive and we have multiple competitors for fuel.
The Agriculture industry utilizes LNG to power high horsepower engines and also when food processing utilizes heat such as in drying operations as LNG has a clean and consistent burn that makes heating operations more predictable. Energy. Energy producers use high horsepower engines to power their drilling and pressure pumping operations.
The Agriculture industry utilizes LNG to power high horsepower engines, greenhouses and also when food processing utilizes agricultural dryers for generating heat as LNG has a clean and consistent burn that makes heating operations more predictable. Energy. Energy producers use high horsepower engines and turbines to power their drilling and pressure pumping operations.
Our fleet consists primarily of trailer-mounted mobile assets, making delivery to and between customer locations more efficient. We deploy these assets on job sites to provide our customers with the equipment required to transport, store, and consume LNG in their fueling operations.
Our fleet consists primarily of trailer-mounted mobile assets, making delivery to and between customer locations more efficient. We deploy these assets on job sites to provide our customers with the equipment required to transport, store, and consume LNG in their operations. Revenues earned from cryogenic equipment rental are included within Rental revenue.
International, Federal, State and local safety standards and operational regulations require the transfer of LNG, hydrogen, CNG and other fuels to be conducted in accordance with specific written safety standards and operational procedures. These procedures require that trained, qualified personnel be in attendance and manage all transfer operations.
International, Federal, State and local safety standards and operational regulations require the transfer of LNG to be conducted in accordance with specific written safety standards and operational procedures. These procedures require that trained, qualified personnel be in attendance and manage all transfer operations. Storage and Vaporization of LNG at Customer Sites.
As shipping and marine transportation companies expand the use of LNG as a fuel source, we believe that we are positioned to capitalize on future growth.
We believe that opportunities to provide LNG as a fuel source to the marine transportation industry represents a significant opportunity for us. As shipping and marine transportation companies expand the use of LNG as a fuel source, we believe that we are positioned to capitalize on future growth.
The physical characteristics of LNG make it a safer and more environmentally friendly fuel when compared to diesel and propane because it boils and dissipates rapidly into the air when spilled instead of pooling on or near the ground.
ULSD, Propane & LNG pricing- December 31, 2012 to December 31, 2023 Better Safety than Alternative Fuels. The physical characteristics of LNG make it a safer and more environmentally friendly fuel when compared to diesel and propane because it boils and dissipates rapidly into the air when spilled instead of pooling on or near the ground.
However, some of our competitors have longer operating histories and market-based experience, larger customer bases, more expansive brand recognition, deeper market penetration and substantially greater financial, marketing and other resources than our business.
We believe we compare favorably with many of our competitors on the basis of these factors. However, some of our competitors have longer operating histories and market-based experience, larger customer bases, more expansive brand recognition, deeper market penetration and substantially greater financial, marketing and other resources than our business.
To ensure safe, reliable and efficient operations in a highly regulated environment, the Company supports and utilizes various employee training, educational programs as well as safety programs with detailed safety and health related procedures that all are required to follow. Intellectual Property The intellectual property portfolio of Stabilis and its subsidiaries includes patents and trademarks.
The safety of its employees, contractors, customers and communities is paramount to the Company’s success. To ensure safe, reliable and efficient operations in a highly regulated environment, the Company supports and utilizes various employee training, educational programs as well as safety programs with detailed safety and health related procedures that all employees are required to follow.
Based on our experience, power generation and heating applications at mines can consume 10,000 to 100,000 LNG gallons per day. Pipeline and Utilities . LNG usage in utility and pipeline applications varies by project type. North America has an expansive network of pipelines that, based on age and increasingly more stringent regulations, require routine testing and maintenance.
Pipeline, Remote Power and Utilities . LNG usage in utility and pipeline applications varies by project type. North America has an expansive network of pipelines that, based on age and increasingly more stringent regulations, require routine testing and maintenance.
For the year ended December 31, 2022, Aggreko Plc and Minera Penmont each accounted for more than 10% of our revenues. During such period, no other purchaser accounted for 10% or more of our revenue. Aerospace.
For the year ended December 31, 2023, Aggreko Plc accounted for more than 10% of our revenues with several project sites in operation. During such period, no other purchaser accounted for 10% or more of our revenue. Aerospace.
The Company has a patent in both US and Canada for the use of natural gas for well enhancement. The Company has one pending application in Mexico for the use of natural gas for well enhancement. The Company has two patents for rotary fluid processing systems and a US patent for a gas processing system.
Intellectual Property The intellectual property portfolio of Stabilis and its subsidiaries includes patents and trademarks. The Company has a patent in the US, Canada and Mexico for the use of natural gas for well enhancement. The Company has two patents for rotary fluid processing systems and a US patent for a gas processing system.
Competition The market for natural gas is highly competitive and we have multiple competitors for natural gas fuel. Stabilis believes the biggest competition for LNG in these applications are distillate fuels and propane as they power the majority of engines and generators in our target markets.
Stabilis believes the biggest competition for LNG in these applications are distillate fuels and propane as they power the majority of engines and generators in our target markets. We also compete with other fuel sources including pipeline natural gas and compressed natural gas ("CNG").
Market for Small-Scale LNG in North America LNG can serve as a partner fuel for renewable energy sources and provides an important balance between environmental sustainability, security and access, and economic viability as a source of fuel.
We plan to leverage this experience to grow our business by investing in new production and distribution assets throughout North America. 4 Table of Contents Market for Small-Scale LNG in North America LNG can serve as a partner fuel for renewable energy sources and provides an important balance between environmental sustainability, security and access, and economic viability as a source of fuel.
Demonstrated ability to execute LNG projects safely and cost effectively. Stabilis has produced and delivered over 420 million gallons of LNG to our customers throughout our 18-year operating history.
Stabilis has produced and delivered over 470 million gallons of LNG to our customers throughout our 20-year operating history.
The operation and siting of storage and vaporization of LNG may also require approval by local planning boards and fire departments. 9 Import & Export of LNG. Stabilis has the ability to import or export LNG from the United States to Mexico and Canada via truck.
The operation and siting of storage and vaporization of LNG may also require approval by local planning boards and fire departments. Import & Export of LNG.
Additionally, utilities and their affiliates typically have unique competitive advantages, including a lower cost of capital, substantial and predictable cash flows, long-standing customer relationships, greater brand awareness, and large sales and marketing organizations. Stabilis does not believe that we compete with mid-scale and world-scale LNG liquefiers that produce more than 1,000,000 LNG gallons per day.
Additionally, utilities and their affiliates typically have unique competitive advantages, including a lower cost of capital, substantial and predictable cash flows, long-standing customer relationships, greater brand awareness, and large sales and marketing organizations.
Stabilis believes that our extensive operating experience positions us to be a leader in the North American small-scale LNG markets. We plan to leverage this experience to grow our business by investing in new production and distribution assets throughout North America.
Stabilis believes that our extensive operating experience positions us to be a leader in the North American small-scale LNG markets.
Mines use LNG to fuel electrical generators and to produce heat for their processing activities. Several mines have also tested using LNG as a fuel for their mine trucks and other high horsepower engine equipment. In addition to fuel cost benefits, LNG can help reduce emissions at mines that are often located in environmentally sensitive areas.
Mines also use LNG as a fuel for their mine trucks and other high horsepower engine equipment. In addition to fuel cost benefits, LNG can help reduce emissions at mines that are often located in environmentally sensitive areas. Based on our experience, power generation and heating applications at mines can consume 10,000 to 100,000 LNG gallons per day.
We believe that the availability of proven small-scale LNG production and distribution technologies reduces the technology risk in growing the industry, but it also places a premium on the owner’s or operator’s construction and operating capabilities.
We believe that the availability of proven small-scale LNG production and distribution technologies reduces the technology risk in growing the industry, but it also places a premium on the owner’s or operator’s construction and operating capabilities. 6 Table of Contents Our Customers Stabilis serves customers in a variety of end markets, including aerospace, agriculture, energy, industrial, marine bunkering, mining, pipeline, remote power and utility markets within North America.
We also compete with other fuel sources including pipeline natural gas and compressed natural gas ("CNG"). Stabilis competes with other natural gas companies, as well as other fossil fuel sources, based on a variety of factors, including, among others, cost, supply, availability, quality, emissions, and safety of the fuel.
Stabilis competes with other natural gas companies, as well as other fossil fuel sources, based on a variety of factors, including, among others, cost, supply, availability, quality, emissions, and safety of the fuel. Location is often a primary competitive factor as transportation costs limit the distance LNG can be transported at competitive prices.
These large LNG production facilities typically are designed and permitted to fill large marine vessels that deliver cargos of 26.5 million LNG gallons or more to large import terminals in foreign markets. We do not believe that any of them currently have or plan to have truck loading facilities that would be required to supply LNG to small-scale LNG customers.
These large LNG production facilities typically are designed and permitted to fill large marine vessels that deliver cargos of 26.5 million gallons (approximately 42,200 tonnes) of LNG or more to large import terminals in foreign markets.
The Company’s ability to attract employees is also significantly influenced by our efforts to create a culture founded on opportunity, personal growth, respect, collaboration and its ability to value the diverse backgrounds, skills and contributions that its employees offer.
The Company’s ability to attract employees is also significantly influenced by our efforts to create a culture of opportunity, personal growth, respect, collaboration and an appreciation of the diverse backgrounds, skills, and contributions that its employees offer. Stabilis strives to provide its people with all of the tools and support necessary for them to succeed and safely perform their duties.
We deliver LNG to our customers’ work sites from both our own production facilities and our network of approximately 30 third-party production sources located throughout North America. We own a fleet of cryogenic trailers to transport and deliver LNG. We also outsource similar equipment and transportation services for LNG from qualified third-party providers as required to support our customer base.
We own a fleet of cryogenic trailers to transport and deliver LNG. We also outsource similar equipment and transportation services for LNG from qualified third-party providers as required to support our customer base. Revenues earned from the transportation and logistical services of LNG to our customers are included within LNG Product revenue.
Large marine vessels can take several hundred thousand gallons of LNG in a single fuel bunkering event. Mining . Mines, including those producing metals, rare earth materials, and coal, are often located in remote locations that are off the electrical grid and do not have natural gas pipeline access.
Mines, including those producing metals, rare earth materials, and coal, are often located in remote locations that are off the electrical grid and do not have natural gas pipeline access. Mines use LNG to fuel electrical generators and to produce heat for their processing activities.
We believe that LNG can be delivered to customers at prices that are lower and more stable than what they would pay for distillate fuels or propane. In addition, several of our customers have reported that LNG as a fuel decreases their operating costs by reducing equipment maintenance requirements and providing more consistent burn characteristics.
We believe that LNG can be delivered to customers at prices that are lower and more stable than what they would pay for distillate fuels or propane.
Government Regulation and Environmental Matters Stabilis is subject to a variety of federal, international, state, provincial and local laws and regulations relating to the environment, health and safety, labor and employment, building codes and construction, zoning and land use, public reporting and taxation, among others.
The price of natural gas can fluctuate at any time during the year due to isolated factors, but on average, natural gas prices tend to be higher in peak winter and peak summer months when heating and cooling demand is seasonally higher. 8 Table of Contents Government Regulation and Environmental Matters Stabilis is subject to a variety of federal, international, state, provincial and local laws and regulations relating to the environment, health and safety, labor and employment, building codes and construction, zoning and land use, public reporting and taxation, among others.
This annual report on Form 10-K, including all exhibits and amendments, has been filed electronically with the SEC.
This annual report on Form 10-K, including all exhibits and amendments, has been filed electronically with the SEC. 10 Table of Contents ITEM 1A. RISK FACTORS Investing in shares of our common stock involves a high degree of risk.
We also do not believe that any mid-scale or large-scale liquefiers currently have plans to install LNG loading capabilities for marine vessels smaller than 7.9 million LNG gallons. 8 Sales and Marketing Stabilis markets our products and services primarily through our direct sales force, which includes sales representatives covering all of our major geographic and customer markets, as well as attendance at trade shows and participation in industry conferences and events.
Sales and Marketing Stabilis markets our products and services primarily through our direct sales force, which includes sales representatives covering all of our major geographic and customer vertical markets, as well as attendance at trade shows and participation in industry conferences and events.
The following chart illustrates the lower cost and decreased price sensitivity of LNG by comparing the historical wholesale price of Propane, Ultra-Low No. 2 Diesel, Indicative Liquefied Natural Gas and Natural Gas (Henry Hub). 5 ULSD, Propane & LNG pricing- December 31, 2012 to December 31, 2022 Better Safety than Alternative Fuels.
These factors have made LNG more economical than competing fuel sources, and we believe that LNG will maintain this cost advantage into the foreseeable future. 5 Table of Contents The following chart illustrates the lower cost and decreased price sensitivity of LNG compared to propane and diesel, by comparing the historical wholesale price of Propane, Ultra-Low No. 2 Diesel, Indicative Liquefied Natural Gas and Natural Gas (Henry Hub).
We have also developed many processes and procedures that we believe improve our customers’ use of LNG in their operations. Our engineers help our customers design and integrate LNG into their fueling operations and our field service technicians help our customers mobilize, commission and reliably operate on the job site.
Our engineers help our customers design and integrate LNG into their operations and our field service technicians help our customers mobilize, commission and reliably operate on the job site. Revenues earned from engineering and field support services are included within Service revenue.
Our equipment is designed specifically for use in small-scale LNG applications and includes the safety and operational features that our customers and our regulators require. 4 Engineering and Field Support Services —Stabilis has experience in the safe, cost effective, and reliable use of LNG in multiple customer applications.
Engineering and Field Support Services —Stabilis has experience in the safe, cost effective, and reliable use of LNG in multiple customer applications. We have also developed many processes and procedures that we believe improve our customers’ use of LNG in their operations.
We also maintain an Emergency Response Action Plan (“ERAP”) with Transport Canada. During the third quarter of 2022, Stabilis received authorization from the DOE to export domestically produced LNG to all free trade and non-free trade countries, including Asian, European, and Latin American importing nations for up to 51.75 billion cubic feet per year.
During the third quarter of 2022, Stabilis received authorization from the DOE to export domestically produced LNG to all free trade ("FTA") and non-free trade ("non-FTA") countries, for up to 51.75 billion cubic feet per year (or approximately 1.0 MTPA) of natural gas equivalent. The authorization is for a term of 28 years, provided certain milestones of utilization are achieved.
Industrial applications for LNG include sand and aggregate producers, asphalt plants, greenhouses, food processers, paper mills, agricultural dryers, and general manufacturing facilities. Remote sand producers and mobile asphalt plants that use LNG to produce heat for their processing and drying operation are among our largest customers. LNG often replaces propane, fuel oil, or diesel fuel in these applications.
Based on our experience, depending upon whether the customer uses dual-fuel pressure pumping engines or turbines, energy customers can consume from 10,000 to 60,000 LNG gallons per day. Industrial. Industrial applications for LNG include sand and aggregate producers, asphalt plants, food processers, paper mills, and general manufacturing facilities. LNG often replaces propane, fuel oil, or diesel fuel in these applications.
The authorization is for a term of 28 years. Stabilis has not made any exports under this approval during the year ended December 31, 2022. Human Capital Resources Stabilis believes that one of its key assets is the collective expertise, experience and diversity of its workforce.
In 2023, the Company did not deliver LNG to Canada. 9 Table of Contents Human Capital Resources Stabilis believes that one of its key assets is the collective expertise, experience and diversity of its workforce.
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These factors have made LNG more economical than competing fuel sources, and we believe that LNG will maintain this cost advantage into the foreseeable future.
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We make the determination of LNG and transportation supply sources based on the cost of LNG, the transportation cost to deliver to regional customer locations, and the reliability of the supply source. Revenues earned from the production and sales of LNG are included within LNG Product revenue.
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Our Customers Stabilis serves customers in a variety of end markets, including aerospace, agriculture, energy, industrial, marine bunkering, mining, pipeline, remote power and utility markets within North America.
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Large marine vessels, such as cruise vessels and containerships, can take several hundred thousand gallons of LNG in a single fuel bunkering event.
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Based on our experience, dual-fuel drill rigs can consume 1,000 to 5,000 LNG gallons per day and dual-fuel pressure pumping spreads can consume 10,000 to 20,000 LNG gallons per day. Energy producers use the field gas being produced in their operations to fuel the turbine engines that power their pressure pumping spreads.
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At December 31, 2023, there were 497 LNG fueled marine vessels in the global fleet with 532 more new build vessels on order for delivery in 2024 through 2027 which will more than double the number of LNG fueled vessels over the next three years. New build containership vessels represent the largest sector with 244 vessels on order.
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While turbines can burn field gas, they often require significant amounts of LNG for primary or back-up fuel supply because field gas often varies widely in volume, composition, and pressure. Based on our experience, turbine driven pressure pumping operations can consume 30,000 to 60,000 LNG gallons per day when using LNG as the primary fuel. Industrial.
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During the fourth quarter of 2023, the Company entered into a two-year marine bunkering contract for an estimated 22 million gallons per year. The Company expects that additional marine bunkering opportunities will become available as additional marine vessels that use LNG as the primary fuel of choice are delivered to vessel fleets and commence routine operations.
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Based on our experience, sand production facilities can consume 10,000 to 20,000 LNG gallons per day, and asphalt plants can use 5,000 to 10,000 LNG gallons per day. Marine Bunkering of LNG . We believe that opportunities to provide LNG as a fuel source to the marine transportation industry represents a significant opportunity for us.
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LNG also allows marine transportation providers to meet strict emission requirements that are difficult to achieve using common marine fuels, such as heavy fuel oil, but could be achieved using LNG. Large marine vessels such as containerships can take several hundred thousand gallons of LNG in a single fuel bunkering event.
Removed
Location is often a primary competitive factor as transportation costs limit the distance LNG can be hauled at competitive prices. We believe we compare favorably with many of our competitors on the basis of these factors.
Added
The Company expects that additional marine bunkering opportunities will become available as additional marine vessels that use LNG as the primary fuel of choice are delivered to vessel fleets and commence routine operations in North America. Mining .
Removed
The price of natural gas can fluctuate at any time during the year due to isolated factors, but on average, natural gas prices tend to be higher in peak winter and peak summer months when heating and cooling demand is seasonally higher.
Added
In addition, several of our customers have reported that LNG as a fuel decreases their operating costs by reducing equipment maintenance requirements and providing more consistent burn characteristics. 7 Table of Contents Demonstrated ability to execute LNG projects safely and cost effectively.
Removed
These procedures must be implemented at each transfer site location and copies of the procedures be available to site personnel. Minimum safety signage that meets governing regulations must be displayed and visible at each site and on appropriate equipment. Storage and Vaporization of LNG at Customer Sites.
Added
Stabilis does not believe that we compete with mid-scale and world-scale LNG liquefiers that produce more than 1,700,000 LNG gallons per day (approximately 2,700 tonnes per day or 1.0 MTPA).
Removed
In support of our business in Mexico, we maintain an export license from the United States Department of Energy (“DOE”) and maintain import permits to bring the LNG into the country. In support of our business in Canada, Stabilis maintains an import and export license from the “DOE” and from the National Energy Board of Canada (“NEB”).
Added
We do not believe that any of them currently have or plan to have truck loading facilities that would be required to supply LNG to small-scale LNG customers.
Removed
Stabilis strives to provide its people with all of the tools and support necessary for them to succeed and safely perform their duties. The safety of its employees, contractors, customers and communities is paramount to the Company’s success.
Added
As of December 31, 2023, the Company has not made any exports under this approval and has not expended material funds nor entered into any sales commitments. For exports to non-FTA countries, the Company has two years from the date it received authorization with which to initiate exportation of LNG.
Added
For exports to FTA countries, the Company has five years from the date it received the authorization with which to initiate exportation of LNG.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLeased August 14, 2024 George West, TX LNG Plant 3,400 sq. ft. on 31.04 acres Owned N/A Port Allen, LA LNG Plant 2,400 sq. ft. on 18.98 acres Owned N/A The Company also leases various trailer storage sites that are not material to the Company's operations on a short term basis in California, Colorado and Florida to support operations in those areas.
Biggest changeLeased August 14, 2024 George West, TX LNG Plant 3,400 sq. ft. on 31.04 acres Owned N/A Port Allen, LA LNG Plant 2,400 sq. ft. on 18.98 acres Owned N/A The Company also leases marine bunkering staging sites in Texas and has various trailer storage sites in California and Colorado on a short term basis to support operations.
In accordance with the termination, the Company was released from all future rights and obligations under the lease. Stabilis or its subsidiaries currently own or lease the following principal properties: Facility Location Use Size Leased or Owned Expiration of Lease Houston, TX Office 13,000 sq. ft. Leased Month to month Monterrey, Mexico Office 1,888 sq. ft.
Stabilis or its subsidiaries currently own or lease the following principal properties: Facility Location Use Size Leased or Owned Expiration of Lease Houston, TX Office 13,000 sq. ft. Leased Month to month Monterrey, Mexico Office 1,888 sq. ft.
ITEM 2. PROPERTIES The corporate headquarters of Stabilis are located at 11750 Katy Freeway, Suite 900, Houston, TX 77079. Stabilis leases its general office space at its corporate headquarters from a related party, on a month-to-month basis. On July 30, 2021, the Company terminated its former office lease for a fixed settlement, payable in 43 monthly payments.
ITEM 2. PROPERTIES The corporate headquarters of Stabilis are located at 11750 Katy Freeway, Suite 900, Houston, TX 77079. Stabilis leases its general office space at its corporate headquarters from a related party, on a month-to-month basis.
We believe that our existing facilities are adequate for our operations and their locations allow us to efficiently serve our customers.
We believe that our existing facilities are adequate for our operations and their locations allow us to efficiently serve our customers. ITEM 3. LEGAL PROCEEDINGS The Company becomes involved in various legal proceedings and claims in the normal course of business.
Added
In management’s opinion, the ultimate resolution of these matters will not have a material effect on our financial position or results of operations. See Note 14 of the Notes to Consolidated Financial Statements for a discussion of our commitments and contingencies and any outstanding legal matters.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Company anticipates that, for the foreseeable future, it will retain any earnings for use in the operations of its business. Holders As of March 9, 2023, we had 23 holders of record of our common stock and 18,433,655 shares of common stock outstanding, based on information provided by our transfer agent.
Biggest changeThe Company anticipates that, for the foreseeable future, it will retain any earnings for use in the operations of its business. Holders As of March 5, 2024, we had 26 holders of record of our common stock and 18,585,014 shares of common stock outstanding, based on information provided by our transfer agent.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock trades under the symbol “SLNG” on The Nasdaq Stock Market LLC. The Company did not declare or pay cash dividends on common shares in either fiscal year 2022 or 2021.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock trades under the symbol “SLNG” on The Nasdaq Stock Market LLC. The Company did not declare or pay cash dividends on common shares in either fiscal year 2023 or 2022.

Other SLNG 10-K year-over-year comparisons