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Questar Fueling Company, an affiliate of the natural gas focused company Questar Corp. (STR - Analyst Report), has taken a step to support the fuel needs of natural gas vehicles (NGVs) in Houston, Texas where it has opened a compressed natural gas (CNG) fueling facility.

The facility – largest in the nation – will serve around 200 Central Freight Lines’ and Swift Transportation’s class-8 natural gas-powered trucks which are expected to consume about 5 million diesel-gallon equivalents of natural gas per year. In addition, it would also support other trucking fleet and public vehicles running on CNG.

Management believes that prominent trucking firms like Central Freight Lines and Swift Transportation would not only benefit from their move to CNG but will also aid the environment.

Central Freight Lines management plans to bring online two more similar CNG stations strategically located in Texas to support their expanding operations.

Swift Transportation also agrees to the benefits of switching to the abundantly available, clean burning natural gas as transportation fuel through this first commercial-private partnership facility.

Salt Lake City, Utah-based Questar is a natural gas-focused energy company with three principal subsidiaries – Wexpro Company, Questar Pipeline and Questar Gas Company.

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. An above-average credit quality adds to the bullish sentiment. However, we are concerned about the current volatile natural gas price environment that may restrict the company’s near-term growth prospects.

Questar currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider other utility stocks such as AGL Resources Inc. (GAS - Analyst Report), MDU Resources Group Inc. (MDU - Snapshot Report) and Atmos Energy Corp. (ATO - Snapshot Report) which currently hold a Zacks Rank #2 (Buy) and offer good value.
 

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