Clean Energy Fuels Partners with Total SE to Develop Carbon-Negative RNG Production Facilities

Source: Streetwise Reports   12/22/2020

Shares of Clean Energy Fuels Corp. traded 23% higher to a new 52-week high price after the company reported it is entering into a $145 million 50-50 joint venture with Total SE of France to develop carbon-negative renewable natural gas production facilities in the U.S.

Natural gas retailer Clean Energy Fuels Corp. (CLNE:NASDAQ), which supplies compressed, liquefied and renewable natural gas for light, medium and heavy-duty vehicles, yesterday announced that it has signed a memorandum of understanding with its largest shareholder, Total SE (TOT:NYSE ADR), “to create a 50/50 joint venture to develop carbon-negative renewable natural gas (RNG) production facilities in the U.S., as well as credit support to build additional downstream RNG fueling infrastructure.”

Under the terms of the memorandum, Total will contribute $50 million and Clean Energy will provide $30 million to the proposed joint venture. In addition, Total will provide $65 million in credit support to Clean Energy for it to develop the downstream RNG value chain, which sets aside $45 million for contracted RNG fueling infrastructure.

Clean Energy Fuels pointed out that the two companies have already partnered in the Zero Now program to expand the use of RNG in the heavy-duty truck market. The program makes it possible for companies who maintain large fleets to the opportunity to purchase natural gas trucks for the same price as diesel trucks.

The company advised that the demand for carbon-negative RNG has grown rapidly through the Zero Now program with many large trucking companies participating including Estes Express Lines, KeHE Distributors, Kenan Advantage, Tradelink Transport and many other firms.

The firm stated that RNG which is derived from dairy farms and other agricultural sources offers great economic savings and helps power vehicle fleets with the cleanest fuel in the world. The company explained that “the California Air Resources Board gives these carbon-negative RNG projects a carbon intensity Score (gCO2e/MJ) of -250 (or lower) compared to 97 for diesel and 46 for electric batteries.”

Clean Energy Fuels’ CEO and President Andrew J. Littlefair remarked, “We are very fortunate to have a partner in Total that is so supportive on a number of levels…Both our companies have recognized the enormous opportunity that a carbon-negative fuel can play in our ambitious efforts to combat climate change. This new agreement will allow Clean Energy to increase the flow of low-CI RNG as the demand expands, as well as the capital to build new fueling stations for additional contracted fleets.”

The company commented that it is well on its way to achieving its corporate goal which is “to meet the rapidly growing demand by customers for carbon-negative RNG and to deliver 100% Redeem™ branded RNG to its entire fueling infrastructure by 2025.”

Clean Energy Fuels Corp. is based in Newport Beach, Calif. and is a provider of clean fuel for the transportation market. The company’s Redeem™ renewable natural gas (RNG) is derived from captured biogenic methane which is produced from decomposing organic waste. The company’s RNG products help power commercial vehicle fleets, airport shuttles, city buses and waste and heavy-duty trucks. The firm advised that RNG usage can serve to aid in reducing climate-harming greenhouse gasses by 70% to 300% depending on the source of the RNG.. The firm has a network of around 540 fueling stations throughout the U.S. and Canada and can deliver Redeem through both compressed natural gas (CNG) and liquefied natural gas (LNG). The company indicated that in addition it owns natural gas liquefication facilities in California and Texas and transports bulk CNG and LNG to non-transportation customers around the U.S.

Total SA is an oil and gas company headquartered in Paris, France. The firm has a market cap of over $112 billion, employs over 100,000 people and has active operations in more than 130 countries. Total is a major energy player that produces and markets fuels, natural gas and low-carbon electricity.

Clean Energy started the day with a market capitalization of around $1.2 billion with approximately 198.3 million shares outstanding and a short interest of about 1.4%. CLNE shares opened 7.4% higher today at $6.38 (+$0.44, +7.41%) over yesterday’s $5.94 closing price and reached a new 52-week high price this morning of $7.46. The stock has traded today between $6.34 to $7.45 per share and is currently trading at $7.32 (+$1.38, +23.23%).

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