Irving Oil has signed up its first New Brunswick customer for compressed natural gas, to be delivered by trucks.
The buyer is another pillar of the New Brunswick economy, McCain Foods, maker of a wide variety of frozen foods.
The companies didn't provide financial terms of the agreement.
Irving Oil has been preparing for some time to deliver gas by truck to its large-scale customers and McCain has been seeking lower-cost sources of energy.
Trucks are seen as cheaper than new pipelines for delivering natural gas, which has been selling at persistently low prices due to a North American oversupply.
McCain vice-president Jean-Pierre Rajette says the switch to natural gas will keep the New Brunswick manufacturing plants competitive with other regions.
"In New Brunswick, the high cost of energy makes it difficult to compete with plants in other regions, which have access to lower-cost energy alternatives. This will help level the playing field," Mr. Rajette said in a joint statement.
He added that natural gas is a relatively clean fuel when it burns, providing an environmental benefit.
Compressed natural gas is a relatively new business for Irving Oil, which operates a refinery in Saint John and sells fuel through 800 Irving-branded stations, primarily in the Maritime provinces and New England.
"We are extremely pleased to be working with McCain Foods," said Darren Gillis, general manager of Irving Energy.
"The availability of natural gas for industrial customers in the Maritimes and Maine means good news for these companies as well as for our region's economy."