France-based Energy producer and provider Total SA has entered into a broad strategic agreement with Clean Energy Fuels aimed at driving the deployment of new natural gas heavy duty trucks.
Total has agreed to purchase up to 50.8 million shares of Clean Energy’s common stock for $83.4 million, becoming Clean Energy’s largest stockholder with ownership of 25% of outstanding shares in the company. The deal is still subject to approval at Clean Energy’s stockholders’ meeting, which will take place on June 8.
Clean Energy, with support from Total, plans to launch a leasing program aimed at placing new natural gas heavy-duty trucks on the road and fueling at Clean Energy stations.
The program would allow fleets to begin driving heavy-duty trucks with natural gas engines at no increased cost compared to the diesel alternative, according to Clean Energy, while also guaranteeing a discounted natural gas fuel price to diesel.
Total intends to provide up to $100 million of credit support for the program, which the companies expect to launch in the third quarter of 2018.
“Customers and regulators around the world are demanding cleaner transportation alternatives, particularly in the heavy-duty market,” said Patrick Pouyanné, chairman and chief executive officer of Total. “Total believes there is a strong development opportunity in the natural gas for transportation market in particular in the United States which benefits from unique giant low-cost gas resources.”
The agreement with Clean Energy is part of Total’s integrated strategy to expand its low carbon businesses. Total has experience with natural gas globally, with operations on five continents.
“There couldn’t be a better endorsement for the future of natural gas heavy-duty trucking in North America than for Total, one of the largest energy companies in the world, to step up with this investment,” said Andrew J. Littlefair, CEO and president of Clean Energy. “Being a European-based company, Total is all too aware of the opportunity to transition to cleaner alternative fuels. Launching the financing program should expedite the adoption of natural gas as the most environmentally friendly fuel for the trucking industry.”