Clean Energy Fuels Partners with Amazon for Renewable Natural Gas

Source: Streetwise Reports   04/19/2021

Clean Energy Fuels shares traded 11% higher after the company reported that it has entered into fuel supply and investment agreement with Amazon for low and negative carbon renewable natural gas.

Natural gas retailer and supplier of compressed, liquefied and renewable natural gas for light, medium and heavy-duty vehicles Clean Energy Fuels Corp. (CLNE:NASDAQ) today announced that “it has signed an agreement with Amazon.com Inc. (AMZN:NASDAQ) to provide low and negative carbon renewable natural gas (RNG).”

The firm indicated in the release that it will provide the RNG fuel to Amazon in 15 different states in the U.S. at 27 of its existing Clean Energy fueling stations. In addition, the company noted that it will expand services through another 19 newly constructed, non-exclusive new or upgraded Clean Energy-owned stations by the end of December 2021.

In addition, the company issued warrants to Amazon giving it the option to purchase up to 53.14 million shares of Clean Fuels common stock. The specific details were outlined in Clean Energy’s Form 8K filing with the U.S. Securities and Exchange Commission. As stated in the Form 8K filing, the first tranche of 13.28 million warrant shares, approximately 25% of the total warrants, vested in conjunction with the fuel supply agreement between the two companies. The remaining warrants will be predicated upon future fuel purchases reaching up to $500 million. The warrants come with an exercise price of $13.49 and are valid until April 15, 2031.

Clean Energy Fuels’ CEO and President Andrew J. Littlefair commented, “If the world is really going to tackle the issue of climate change, all of us need to find solutions that work both environmentally and economically, and that is exactly what this agreement supports…Clean Energy was the first to commercially make RNG available as a vehicle fuel in 2013 and now fuels tens of thousands of vehicles across the country every day.”

Clean Energy Fuels Corp. is based in Newport Beach, Calif., and is a provider of clean fuel for the commercial transportation market. The company’s renewable natural gas is derived from captured biogenic methane that is produced from decomposing organic waste that is then used to create RNG products for powering commercial vehicle fleets, airport shuttles, city buses, and waste and heavy-duty trucks. The firm advised that depending upon the source of the RNG, it can help reduce greenhouse gasses by 60% to 400% compared to diesel and other fuels. The firm has a network of around 565 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 additionally owns natural gas liquefication facilities in Texas and California and transports bulk CNG and LNG to non-transportation customers throughout the U.S.

Clean Energy Fuels started the day with a market cap of around $2.2 billion with approximately 199.2 million shares outstanding and a short interest of about 5.25%. CLNE shares opened 26% higher today at $14.09 (+$2.95, +26.48%) over Friday’s $11.14 closing price. The stock has traded today between $11.82 and $14.10 per share and is currently trading at $12.39 (+$1.25, +11.22%).

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