NGV Players Merge to Gain Edge in Industry

Natural Gas Vehicles (NGV) appear to be making another push into the spotlight as Westport Innovations Inc. and BC Gas Inc. reported last Thursday that their BCG eFuels Inc. joint venture has merged with Seal Beach, CA-based Pickens Fuel Corp. (PFC) to form the largest natural gas fuels provider for NGVs in North America.

The new company will provide vehicular natural gas --- both compressed natural gas (CNG) and liquefied natural gas (LNG) --- and related services in key markets throughout North America. The initial combined customer base includes more than 25,000 fleet vehicles fueling at more than 75 public and private stations in California, Arizona, Ontario and British Columbia. The combined company said it will still continue to help market NGVs with Ford Motor Co. of Dearborn, MI. The companies said the combined revenues of the two fueling companies in 2000 was C$45 million (US$30 million).

Prior to the merger, Boone Pickens was owner and chairman of PFC. "We have been developing PFC as a major contender for the emerging alternative fuel market and believe this combination of forces will give the new company a critical edge as market demand grows," said Pickens, who was former chairman of Texas-based Mesa Inc.

Some new laws currently popping up around the country are requiring businesses to use cleaner burning fuels for their fleets of vehicles. In Southern California, for example, all new garbage trucks brought into operation after July 2001 must be powered by alternative fuel with natural gas as a leading option. Other markets targeted by the new company besides the refuse industry include transit, shuttle, taxi, police, intrastate trucking, airports, municipalities and interstate trucking.

The merged company said most of its refueling stations offer CNG for private vehicles or fleets of transit buses, shuttle buses and refuse trucks. The company also cited LNG refueling stations as a fast-growing market segment in which it expects to expand in.

One of these LNG stations, scheduled to be operational later this year, will provide fuel for the garbage truck fleet of San Francisco-based Norcal Waste Systems. To comply with the new law, Norcal previously announced it is buying 14 heavy-duty LNG trucks for a field trial of a new, low-emissions natural gas engine technology from Cummins Westport Inc., a joint venture of Westport and Cummins Inc. of Columbus, IN.

"This new enterprise allies natural gas fueling and infrastructure resources with alternative fuel vehicles and alternative fuel engine technology. It allows us to present a complete package to fleet customers seeking to convert to more economic and advanced technologies," said Gordon Barefoot, BC Gas senior vice-president of planning and development and chairman of the combined enterprise.

Westport, the leading developer of natural gas fuel systems for diesel engines, holds a 20% interest in the merged company in return for contributing its 32% interest in BCG eFuels and US$660,000. David Demers, CEO of Westport, has agreed to serve as a director of the merged company. "By offering a complete infrastructure solution, the merged company will assist our natural gas vehicle engine customers," he said.

Andrew Littlefair, formerly President of PFC, has been appointed president and CEO of the merged company, which will be based in Seal Beach, CA. Al Basham, formerly president of BCG eFuels, is executive vice president.

"We intend to increase sales in markets we now serve, as well as in new key markets in both the United States and Canada," said Littlefair. "In time, we may extend our reach beyond those borders as other countries recognize the need for, and begin to implement, alternative natural gas fuel strategies."

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