Clean Energy Fuels Corp. (CLNE), a leading purveyor of natural gas fuel, reported that IMW Industries Ltd., its fully owned affiliate, has entered into an agreement with China Gas Holdings Ltd.
Per the three-year contract, IMW Industries will purvey its CleanGAS Technology products and services, which includes roughly 416 CleanCNG Compressors, 186 dryers, 527 dispensers, and 387,500 liters of buffer storage to China Gas.
China Gas would utilize the products for the manufacturing of nearly 310 compressed natural gas (CNG) stations for the Chinese public. The deal is estimated to have a value of roughly $167.0 million. Clean Energy arm also reveals that it has already provided China with equipment and associate technologies for the manufacture of 124 stations. All tools related to the construction were fabricated at IMW Industries’ Suzhou-Taicang, China-based facility.
China Gas will get funding from Export Development Canada for the purchase of the products and all related services during the three-year contract period. Initially, China Gas will use $5.0 million to purchase roughly 29 CleanCNG Compressors, all of which are expected to be used for the construction of the initial 19 stations. The compressors will be delivered by the fourth quarter of 2013.
Clean Energy reveals that instead of gasoline and diesel fuel, China is now on the way to use natural gas as an alternative source of energy, and hence, has been investing drastically to build associated infrastructure.
For the second quarter of 2013, Clean Energy reported loss per share of 13 cents, narrower than the Zacks Consensus Estimate of loss of 23 cents per share. This was aided by increased delivery of CNG, liquefied natural gas (LNG), and renewable natural gas (RNG) to customers when compared with the year-ago period.
Clean Energy currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
However, one can have a look at energy firms like Range Resources Corporation (RRC), VOC Energy Trust (VOC) and Matador Resources Company (MTDR) as attractive investments. All the stocks sport a Zacks Rank #1 (Strong Buy).
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