How Much Does it Cost to Buy a Natural Gas Generator?

Updated: Apr 9, 2018

No matter where we travel in the world or whom we talk to, one of the most frequently asked questions in our industry is: How much does it cost to buy a natural gas generator? Given that there are several factors to evaluate when determining the price of a natural gas generator, we will help guide you through the basics in this article.

This article is focused on the costs of purchasing natural gas generators built for prime power in industrial settings, such as the oil and gas fields of the world. Information about natural gas generators for standby applications can be found in our article titled: Do Natural Gas Generators Work for Standby Applications? The purchase pricing discussed herein focuses on units tasked with running 24 hours a day, 7 days a week, in any climate. If you need information about leasing, please see our article: How Much Does it Cost to Lease a Natural Gas Generator?

Natural Gas Generators Features and How They Affect Pricing

Natural gas generators are not unlike many other goods that we as consumers are familiar with buying. The fact is, there are many on the market and not everything available is suited for prime power applications. Once you have narrowed the field down to industrial generators that can operate in any environment, you will see add-on options much like you would see when purchasing a car, home theatre system, or other goods. For example, a base model car can get very expensive after adding leather seats, chrome wheels, or remote start-up. In the generator world, there aren’t as many add-ons as in vehicles; however, knowing that the generator provides an invaluable service to you, it is important to know some distinguishing factors affecting price. Industrial generators typically power artificial lift, oil rigs, oil facilities, man camps, buildings, and other living spaces where line power is either unavailable, behind schedule, or unreliable.

With the understanding that people package generators with different equipment, we have listed the most common add-ons in the industry that we see our customers using on a regular basis:

  • Trailer mounted vs. skid mounted

  • Extended oil day tanks

  • Remote monitoring telemetry

  • Auto switching duel fuel kits

  • Propane vapor kits

  • Sound attenuation

  • Catalytic converter

  • Auto dump scrubber tanks

  • Fuel gas regulator

  • Over-sized cooling package

  • Cold weather package

  • Fluid containment

With so many different options, we build our units to take out the guesswork. Every single one of our units comes pre-equipped with all available options except for additional sound attenuation (typically used only when industrial units are placed near homes). This type of package allows the generator set to function in all environments around the world, while also giving the most reliable and consistently priced solution to the customer.

Maintenance Plans and Natural Gas Generators

Generator with Maintenance: This option is the most widely selected purchase option as most clients don’t have the expertise or desire to maintain their own purchased units. When a customer purchases a generator with a maintenance plan, they don’t have to worry about anything except providing a fuel source and electrical hook-ups. The size ranges of engines most commonly used for industrial prime power start in the 8 Liter range and provide around 100kW-125kW of prime power to engines that can provide in excess of one megawatt of power. When looking at well-built industrial engines that will last as long as needed, the average price range is near $1,000/kW. For example, a 125kW prime power generator set costs in the range of $125,000. Likewise, a 1mW (1,000kW) unit costs near $1,000,000.00. While there is variation depending on brand and some of the factors discussed above, this price range is typical.

Some companies include one year of maintenance in their purchase prices; however, it is more common to have a purchase price as well as a monthly service charge listed separately. While service costs widely vary depending on distance from location of the generator, technicians in the area, etc., the following routine maintenance prices can be expected in addition to purchase prices:

  • 50kW – 125kW: $400-$1,200/month

  • Up to 500kW: $1,000 – $1,500/month

  • Up to 1,000kW: $1,200 – $2,000/month

Generator Without Maintenance: The price ranges for generators without maintenance are the same as discussed above. That being said, we like to make sure the consumer is aware that maintaining the units is a highly technical process. While performing an oil change is something that is not a challenge, it is much more problematic to adequately perform valve lash adjustment and other important diagnostic work on industrial generators. For these reasons, we like to make sure consumers have training and experience in the maintenance of high-tech industrial engines so as not to set them up for failure.

The Bottom Line: In almost all industrial applications, especially oil and gas fields, natural gas powered generators save users money every single day compared to their diesel counterparts. Importantly, there are many areas of the country where natural gas generators can be more cost effective and more reliable than line power coming from your local utility provider.

Given the complexity of generator systems and applications, it is important to be an informed consumer and ask questions prior to owning your own generator. If you do not have prior generator experience, we might recommend leasing or leasing-to-own.

For more information on diesel savings, please see our article titled: How Much Does it Cost to Fuel A Diesel Generator?. Also, you can contact us directly here (link to contact page) for more specific questions. Thanks for reading and considering the prospect of saving by using one of our units. We hope we have accomplished our goal of educating you about the cost of purchasing a natural gas generator.

MNGS is a Portfolio Company of BP Energy Partners

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