PNG Ventures Inc. has agreed to purchase a 100% ownership interest in Earth Biofuels subsidiary Earth LNG Inc., which includes an Arizona plant that is one of only five vehicle-quality liquefied natural gas (LNG) production facilities in the United States, the company said Tuesday. Financial terms were not disclosed.
The deal includes Earth LNG and all of its subsidiaries, including Applied LNG Technologies LLC and its production facility located in Topock, AZ. PNG Ventures and Earth Biofuels said they have agreed to use best efforts to close the transaction on or before June 30 and have agreed to a breakup fee to be paid to PNG Ventures in the event the transaction does not close.
“The execution of the binding letter of intent with Earth Biofuels is PNG Venture’s first step towards building a platform to deliver affordable clean energy solutions to the western part of the United States and beyond,” said Kevin Markey, interim CEO of PNG Ventures. “Although we have just begun the process of closing this transaction, we are confident that we have the right partners in place who are committed to building shareholder value and managing this dynamic and growing business.”
Markey added that LNG is a clean technology fuel that — unlike ethanol — is a high-BTU per gallon fuel that is not dependent on a food-based feedstock. “Today, high gas prices are being met by equally high food prices due in part to our energy policy, which provides incentives for corn-based ethanol production,” he said. “Increasing LNG use is a common sense approach for Americans to keep their energy dollars in the U.S., use a fuel that does substantially less damage to our environment and buy an alternative fuel that does not compete with and in turn affect the price of food products consumed by Americans.”
PNG Ventures noted that LNG as a fuel produces less greenhouse gases, particulates, oxides of nitrogen and toxins than ethanol, gasoline and diesel. The company added that LNG is about 61% less expensive than gasoline and diesel fuels on a BTU basis.
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