BP and Clean Energy Partner to Expand U.S. Renewable Natural Gas Transportation Fueling Capabilities
March 01 2017 - 6:00AM
Business Wire
BP to Acquire Clean Energy’s Upstream Renewable
Natural Gas Business and Sign Long-Term Supply Agreement with Clean
Energy
BP p.l.c. (NYSE: BP) and Clean Energy Fuels Corp. (Nasdaq: CLNE)
today announced that BP will acquire the upstream portion of Clean
Energy’s renewable natural gas business and sign a long-term supply
contract with Clean Energy to support the firm’s continuing
downstream renewable natural gas business. The deal enables both
companies to accelerate the growth in renewable natural gas supply
and meet the growing demand of the natural gas vehicle fuel
market.
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View the full release here:
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Renewable natural gas fuel, or biomethane, is produced entirely
from organic waste. As a fuel for natural gas vehicle fleets,
including heavy-duty trucks, it is estimated to result in 70
percent lower greenhouse gas emissions than from equivalent
gasoline or diesel fueled vehicles.
Under terms of the agreement, BP will pay $155 million for Clean
Energy’s existing biomethane production facilities, its share of
two new facilities and its existing third party supply contracts
for renewable natural gas. Closing the transaction is subject to
regulatory approval. Clean Energy will continue to have access to a
secure and expanding supply to sell to the growing customer base of
its Redeem™-branded renewable natural gas fuel through a long-term
supply contract with BP.
“Demand for renewable natural gas is growing quickly and BP is
pleased to expand our supply capability in this area,” said Alan
Haywood, chief executive officer of BP’s supply and trading
business. “BP is committed to supporting developments towards a
lower carbon future and, working with Clean Energy, we believe we
will be well-positioned to participate in the growth of this lower
carbon fuel in the U.S.”
Clean Energy, in turn, will be able to expand its Redeem
customer base at its North American network of natural gas fueling
stations, allowing customers to take advantage of the ease and
affordability of switching to a fuel that is both renewable and can
significantly reduce greenhouse gas emissions compared with
diesel.
“We started our Redeem fueling business from scratch less than
four years ago and have grown it into a significant enterprise,”
said Andrew Littlefair, Clean Energy’s president and chief
executive officer. “This transaction will help to take it to the
next level. BP’s investment in and focus on renewable natural gas
supply will ensure that Clean Energy can meet the growing demand of
our customers for low carbon, renewable fuel.”
Clean Energy will buy renewable natural gas fuel from BP and
collect royalties on gas purchased from BP and sold as Redeem at it
stations. This royalty payment is in addition to any payment under
BP’s contractual obligation.
Notes to editors:
- The assets which BP will acquire are
Clean Energy’s existing biomethane production facilities in Canton,
Mich. and North Shelby, Tenn. as well as Clean Energy’s share of
two facilities under construction in Oklahoma City, Okla. and
Atlanta, Ga.
- BP will continue to subcontract the
operations of these facilities to Clean Energy.
- Launched in its California stations in
October 2013, Clean Energy sold 60 million gasoline gallon
equivalents of Redeem in 2016 to customers across multiple states
including UPS, Republic Services, Ryder, Kroger and the City of
Santa Monica’s transit agency. Redeem is the cleanest
transportation fuel commercially available for heavy duty vehicles
in the U.S. today.
- Redeem renewable natural gas is derived
from biogenic methane, biomethane or biogas, which is methane that
is naturally generated by the decomposition of organic waste. The
methane gas is processed, purified and sent into the interstate
natural gas pipeline and is currently made available exclusively to
Clean Energy customers.
- Clean Energy will be hosting a
conference call today at 10:00 am
EST for analysts and reporters with Andrew Littlefair
and Harrison Clay, president of Clean Energy Renewables, to answer
any questions about today’s announcement. To access the call, dial
+1 877 451 6152 in the U.S. and +1 201 389 0879 internationally. A
replay of the call will be available at +1 844 512 2921 in the U.S.
and +1 414 317 6671, replay PIN number: 13656528.
About BP in the U.S.:
Over the past 10 years, BP has invested more than $90 billion in
the U.S. – more than any other energy company. BP is a leading
producer of oil and gas and produces enough energy annually to
light nearly the entire country for a year. Employing about 14,000
people across the country, BP supports more than 130,000 additional
jobs through all of its business activities. For more information,
visit www.bp.com/us.
About Clean Energy
Clean Energy Fuels Corp. is the leading provider of natural gas
fuel for transportation in North America. We build and operate CNG
and LNG vehicle fueling stations; manufacture CNG and LNG equipment
and technologies; develop RNG production facilities; and deliver
more CNG and LNG vehicle fuel than any other company in the U.S.
Clean Energy also sells Redeem™ RNG fuel and believes it is the
cleanest transportation fuel commercially available, reducing
greenhouse gas emissions by up to 70%. For more information,
visit www.CleanEnergyFuels.com.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 that
involve risks, uncertainties and assumptions, such as statements
regarding, among other things: the completion and timing of the
proposed acquisition and Clean Energy’s plans for its RNG business
after completion of the acquisition; increased market adoption of
natural gas as a vehicle fuel generally; growth in Clean Energy’s
customer base for its Redeem™ RNG vehicle fuel; the strength of
Clean Energy’s natural gas fueling infrastructure and its ability
to leverage this infrastructure to increase sales of Redeem™
vehicle fuel; the benefits of natural gas (including RNG) as an
alternative vehicle fuel, including economic and environmental
benefits; and growth in and certainty of supply of RNG. Actual
results and the timing of events could differ materially from those
expressed in or implied by these forward-looking statements as a
result of a variety of factors, including, among others: Clean
Energy’s and BP’s ability to satisfy the conditions required to
close the acquisition; supply, demand, use and prices of crude oil,
gasoline, diesel, natural gas and other alternative fuels, as well
as heavy-duty trucks and other vehicles powered by these fuels; the
willingness of fleets and other consumers to adopt natural gas
(including RNG) as a vehicle fuel; Clean Energy’s ability to
capture a substantial share of the market for alternative vehicle
fuels, if and when it develops and expands, and otherwise compete
successfully in this market; Clean Energy’s ability to implement
its RNG and other business plans; changes to federal, state or
local fuel emission standards or other environmental regulations
applicable to natural gas production, transportation or use,
particularly in light of the uncertainties of the current U.S.
political climate; and general economic, political, regulatory,
market and other conditions. The forward-looking statements made in
this press release speak only as of the date of this press release
and Clean Energy undertakes no obligation to update publicly such
forward-looking statements to reflect subsequent events or
circumstances, except as otherwise required by law. Additionally,
the reports and other documents Clean Energy files with the SEC
(available at www.sec.gov) contain additional information on
these and other risk factors that may cause actual results to
differ materially from the forward-looking statements contained in
this press release.
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version on businesswire.com: http://www.businesswire.com/news/home/20170301005655/en/
BP Press Office+1 281-366-4463uspress@bp.comorClean EnergyJason
Johnston - Media+1
949-437-1411jason.johnston@cleanenergyfuels.comorClean EnergyTony
Kritzer - Investors+1 949-437-1403tkritzer@cleanenergyfuels.com
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