July 12, 2011 / 2:53 PM / 7 years ago

UPDATE 1-Clean Energy hits 2-month high on Chesapeake investment

* Shares rise as much as 16 pct in heavy volume

* New infrastructure to drive natural gas adoption - analyst

* Natural gas engine, fuel system maker Westport seen benefiting (Adds details on the company, sector, analyst comments; updates shares)

By Krishna N Das

BANGALORE, July 12 (Reuters) - Shares of Clean Energy Fuels Corp rose 16 percent after Chesapeake Energy Corp said on Monday it plans to invest $150 million in Clean Energy to fund the development of nearly 150 liquefied natural gas (LNG) truck fueling stations.

Clean Energy, co-founded by Texas oilman and billionaire T. Boone Pickens, sells compressed natural gas to light to medium-duty vehicles and LNG to trucks and other medium to heavy-duty vehicles.

Chesapeake’s intention to invest $1 billion in companies and technologies to replace gasoline and diesel with fuels derived from natural gas follows Westport Innovations and General Motors’ tie-up aimed at developing a natural gas engine technology for light motor vehicles.

“Chesapeake and Clean Energy are making this move to be in position to dominate the coming tipping point in the use of natural gas fuels for heavy-duty trucking,” Craig-Hallum analyst Robert Brown said in a note.

Drivers who filled up with natural gas at the pump saved up to $2 per gallon when gasoline prices hit $4 a gallon. (Graphic: r.reuters.com/get42s)

“Of the various types of natural gas vehicles (NGVs), heavy-duty trucks typically have the most advantageous economics, but a lack of infrastructure has been a hurdle for the adoption of NGVs by interstate trucking companies,” Raymond James analyst Pavel Molchanov said.

Incorporated as Pickens Fuel Corp in 1997 and reincorporated as Clean Energy four years later, it owns, operates or supplies about 224 natural gas fueling stations from British Columbia to the Mexican border. Based in Seal Beach, California, the company is North America’s largest provider of natural gas fuels for the transportation market.

“Chesapeake’s investment in Clean Energy is a game changer as it accelerates the roll-out of fueling infrastructure along major trucking corridors and significantly lowers the barriers to adoption of natural gas fueled trucks,” Brown said.

He also noted the marquee value of Chesapeake, the second-largest natural gas producer in North America. This will also likely help companies related to LNG and CNG equipments.

“Westport and Chart Industries Inc are significant beneficiaries of this infrastructure roll-out as they should see a lift in engine and LNG equipment business, respectively, as a result,” Brown said.

Clean Energy shares, down 5 percent so far this year, rose to $15.16 on Tuesday to a near two-month high in heavy volume.

The U.S.-listed shares of Westport inched up 4 percent to a high of $25.21. (Reporting by Krishna N Das in Bangalore; Editing by Maju Samuel)

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