After years of fits and starts, Philadelphia Gas Works is moving forward yet again to get a liquefied gas facility off the ground.

PGW announced Thursday that it has signed a deal with a private partner to build a new LNG facility at its Passyunk Plant. LNG is a liquid form of natural gas that is in demand as fuel for ships, trucks, trains, and remote power plants.

Liberty Energy Trust, a Conshohocken firm that has shown an interest in PGW since it bid unsuccessfully to buy the utility from the city in 2014, would build the plant and share profits with PGW. The utility projects that it would generate $4 million in additional annual revenue.

The public-private proposal, submitted to the Philadelphia Gas Commission on Thursday, is much less ambitious than the $120 million plan PGW officials envisioned two years ago when they floated the idea of a larger plant of their own in Port Richmond.

The new proposal requires the private entity, Passyunk Energy Center LLC, to put up all the capital, reducing the risk to PGW and its customers.

According to the filing with the Gas Commission, the $60 million project would produce 120,000 gallons of liquefied natural gas a day. LNG is produced by supercooling natural gas to 260 degrees below zero, transforming the gas into liquid.

PGW has produced LNG at its Port Richmond complex for more than 40 years, storing the material in two 120-foot-high, white-domed tanks on Delaware Avenue. LNG is converted back into gas to supply customers on peak winter days.

Without the LNG storage, the pipelines serving the city would be unable to deliver enough gas to meet demand on the coldest winter days. PGW says the plant has saved its customers $3 billion since 1973.

PGW began selling surplus LNG in 2013 to commercial buyers and says it has earned $6 million in three years, which it says helps reduce rates for other customers. The added revenue whet its appetite for a bigger LNG market share.

Under its proposal, the private company will build the liquefaction facility and then lease it back to PGW for a nominal fee.

PGW will operate the new plant and sell LNG production services to PEC for a fee. PGW will also store the liquefied gas at an existing insulated storage tank at Passyunk for a fee. PGW expects about $1.3 million to $1.5 million in fees a year.

The private company will market the liquefied gas and split revenue evenly with PGW.

"This project takes PGW's decades of LNG experience and expertise and puts it to new use on behalf of our customers and the city," Craig E. White, the utility's president and chief executive, said in a statement.

Liberty Energy Trust did not respond to a request for comment Thursday.

The firm, headed by Charles E. Ryan and Boris Brevnov, was an unsuccessful bidder to develop the Port of Philadelphia's Southport project in 2016, and bid unsuccessfully this year to build and operate the Wilmington Port.

Previous coverage

2016: Philadelphia Gas Works is moving forward on a plan to expand its liquefied natural gas plant in Port Richmond to produce fuel for nonutility customers, exposing the city-owned utility to potential profits — and perils — of competitive business markets.

On Tuesday, PGW will seek proposals from companies to buy and market LNG produced from a $120 million expansion at its plant. The utility believes there is a growing demand for LNG to fuel long-haul trucks, trains, marine vessels, and remote power-generation facilities.

The utility's leaders are confident that sales of LNG will generate enough revenue to cover estimated annual debt service of $7 million for the new project and also provide rate relief for customers. PGW has sold 2,000 truckloads of surplus LNG from the plant in recent years, earning millions for its ratepayers.

"We believe LNG is a fertile opportunity for us," said Craig White, PGW's chief executive.

2015: Now that the dust has settled over the failed privatization of Philadelphia Gas Works, the city-owned utility is exploring a new business venture that may take it into uncharted commercial territory.

PGW announced last week that it was accepting nonbinding proposals from buyers of liquefied natural gas, taking aim at potentially lucrative markets for off-system sales of LNG.

The utility produces LNG at its Port Richmond plant, where the fuel is stored and converted back into gas to supply customers on peak winter days. It began selling surplus LNG in 2013 and earned $4 million last year.

2014: If the deal to sell Philadelphia Gas Works dies, the city has several opportunities it can pursue to increase earnings from its gas utility.

One of the more alluring alternatives: Liquefied natural gas, or LNG.

The city utility's most valuable asset is a four-decade-old industrial plant on the gritty Port Richmond waterfront that converts natural gas into liquid form. The utility built the LNG plant to store gas for peak winter days. After the city's population diminished, it now has excess capacity.