Clean Energy Bows Out of Deal to Buy Home CNG Pump Supplier FuelMaker Corp.
By John O'Dell October 16, 2008
By John O'Dell, Senior Editor
Looks like Honda Motor Co. will hang onto its controlling interest in natural gas refueling pump manufacturer FuelMaker Corp.
Honda and FuelMaker were unable to complete their end of a purchase agreement with Clean Energy Fuels Corp., a natural gas fuel company co-founded by oil billionaire-turned-CNG-booster T. Boone Pickens, and the deal was terminated Wednesday.
Clean Energy, based in Southern California, had agreed last month to pay $17 million to purchase Toronto-based FuelMaker from Honda and the private trust that owns the minority interest in the Canadian company.
At the time, Clean Energy said it wanted Fuel Maker to take advantage of the growing demand for less-expensive alternatives to gasoline and diesel fuel by aggressively marketing the company's home- and business-based natural gas pumps.
A gallon-equivalent of compressed natural gas typically costs about 50-cents less than a gallon of gasoline at a retail pump and can cost 40-50 percent less with a home- or business-based pump.
"The new era of high fuel prices has created a dramatic increase in demand for lower-cost natural gas fueling in all transportation sectors, ranging from trucking to consumers," Andrew Littlefair, Clean Energy's president and chief executive, said when the purchase agreement was announced last month.
Clean Energy wanted to expand "our strategic focus to offer fueling solutions for small fleets and consumers,"
Littlefair said.
But on Wednesday the company said it was dropping its purchase plans because Honda and Fuel Maker Trust had failed to meet the Oct. 3 deadline for providing audited copies of Fuel Maker's financial statements.
----------
FuelMaker CNG pumps for comercial and home use. Phill unit for residential use is at top right.
----------
Bruce Russell, a Clean Energy spokesman, signaled today that the company's strategic focus has changed.
What caused the change is unclear, but gas and crude oil prices have fallen considerably since the deal was announced on Sept. 8 and Pickens, who owns a 44 percent stake in the company, is now backing a national campaign of his own to promote wind energy and compressed natural gas fuel.
Clean Energy, said Russell, no longer has any interest in pursuing the FuelMaker purchase and is not pursuing any alternate sources of a home fueling unit.
Honda spokesman David Iida said that the decision to cancel the deal was a mutual one made after "all the conditions were not completed as stipulated within the terms" of the initial purchase agreement.
He said that Honda still would like to sell its interest in FuelMaker, "to an appropriate buyer who wants to expand the CNG fueling infrastructure."
In addition to larger high-volume CNG fueling pumps for businesses, FuelMaker builds and sells or leases the "Phill" home fueling unit used by many purchasers of the natural-gas powered Honda Civic GX - the only CNG car made and sold in the U.S. by a major automaker.
Honda has been making only about 1,000 GX models a year, but says it is boosting production to 2,000 cars for the 2009 model year becauese of increased demand, and may double that to 4,000 cars in 2010.
One drawback to the GX is that natural gas refueling stations are scarce in much of the country, linmiting its usefulness as an all-around family car.
So far,Honda has only sold it to fleert customers who can provide their own fuel source and to retail customers in California and New york, where retial naturall gas pumps are plentiful in major urban areas.
LEAVE A COMMENT