Orange County Business Journal

Clean Energy Shares Up on GE Deal

Chris Casacchia Tuesday, November 13, 2012

Shares of Clean Energy Fuels Corp. jumped Tuesday after the Seal Beach-based company announced a deal to buy two natural gas production plants and related technology from General Electric Co. with financing from the seller.

Investors sent Clean Energy shares up more than 10.7% in late morning trading to a market value of $1.07 billion.

The price of the plants were not disclosed. Clean Energy said the deal includes $200 million from GE’s financing arm for the acquisition.

The plants, acquired from GE Oil & Gas, are billed to rapidly liquefy natural gas into fuel that will primarily be used at Pilot-Flying J truck stops across the country.

The two plants will produce up to 250,000 gallons per day and can be expanded up to 1 million gallons per day as adoption and demand increases, the company said. They are projected to begin production in 2015.

“With an abundance of cleaner, more affordable natural gas here in the U.S., this is an important opportunity for GE to join Clean Energy in changing the way America drives,” GE Chief Executive Jeff Immelt said. “It’s also a critical step in developing a natural gas-for-transportation fuel model that can be easily exported to other countries interested in exactly these kinds of breakthrough projects.”

Clean Energy is the largest builder and operator of natural gas stations in the U.S., with sales of nearly $293 million in 2011.

The acquired plants will support what Clean Energy calls America’s Natural Gas Highway, with major transportation arteries in California, Texas and the Midwest pegged for natural gas stations spread out every 250 miles or so when the multiyear project concludes.

That plan targets the largest segment of the market: heavy-duty haulers that consume some $30 billion of fuel annually.

Clean Energy will build 125 stations this year, up from 60 in 2011, Chief Executive Andrew Littlefair told the Business Journal. About half of this year’s additions throughout the Midwest, Southeast and Northeast are part of the natural gas highway.

Clean Energy has yet to reach profitability despite the strong revenue gains, as it continues to put large sums into its infrastructure projects.

Analysts on average forecast a loss of about $17.3 million in the current quarter on sales of $92.1 million.

Oilman and corporate investor T. Boone Pickens started Clean Energy as a tiny part of his Dallas-based Mesa Petroleum in the late 1980s. He split it off in the late 1990s.