LONDON, UK / ACCESSWIRE / March 2, 2017 / Active Wall St. blog coverage looks at the headline from BP P.L.C. (NYSE: BP) and Clean Energy Fuels Corp. (NASDAQ: CLNE). BP PLC announced on March 01, 2017 that it is acquiring the upstream portion of Clean Energy Fuels' renewable natural gas business. Along with this deal, BP will continue to support Clean Energy's downstream renewable natural gas business and has signed a long-term supply contract for the same. This move will help BP and Clean Energy speed up the supply and growth of renewable natural gas business and at the same time meet the exponential demand for Green Gas as a fuel for vehicles. Register with us now for your free membership and blog access at:

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The acquisition by BP is in-line with its recently announced business strategy wherein the Company is exploring investment opportunities in new business models and technologies which will meet the energy demands of the future.

Commenting on the acquisition, Alan Haywood, CEO of BP's Supply and Trading business said:

"BP is committed to supporting developments towards a lower carbon future and, working with Clean Energy, we believe we will be well-positioned to participate in the growth of this lower carbon fuel in the US."

Andrew Littlefair President and CEO of Clean Energy added:

"BP's investment in and focus on renewable natural gas supply will ensure that Clean Energy can meet the growing demand of our customers for low carbon, renewable fuel."

Clean Energy's renewable natural gas fuel - Redeem

Renewable natural gas fuel is also known as biomethane and is generated from organic waste. Clean Energy's Redeem is the first commercially available, renewable natural gas vehicle fuel and is available in CNG or LNG form. Redeem is derived from biogenic methane, biomethane or biogas, which is methane that is naturally generated by the decomposition of organic waste. The methane gas is processed, purified, and sent into the interstate natural gas pipeline. This processed methane gas then reaches Clean Energy customers through its fuelling stations. Redeem is the cleanest transportation fuel commercially available for heavy duty vehicles in the US today. Redeem was launched in October 2013 and has sold over 60 million gasoline gallon equivalents of Redeem in 2016. Its customers include UPS, Republic Services, Ryder, Kroger, and the City of Santa Monica's transit agency.

According to an estimate by the California Air Resource Board, the use of Redeem as a vehicle fuel results in a whopping 70% reduction in greenhouse gas emissions when compared to greenhouse gas emissions from use of conventional vehicle fuels like gasoline or diesel.

Terms of the Agreement

As per the agreed terms, BP will be paying $155 million for Clean Energy's renewable natural gas business which consists of its existing biomethane production facilities at Canton, Michigan and North Shelby, Tennessee as well as Clean Energy's share of two facilities under construction in Oklahoma City, Oklahoma and Atlanta, Georgia. The agreement also covers Clean Energy's existing third party supply contracts for renewable natural gas. BP plans to continue to subcontract the operations at these facilities to Clean Energy.

BP's long-term supply contract will ensure that Clean Energy will have a secure and expanding supply source of renewable natural gas fuel which it sells under the Redeem brand. Currently, Clean Energy has over 350 fuelling stations across the US and Canada.

Clean Energy will buy renewable natural gas from BP and at the same time collect royalties on this purchased gas which will be sold at Redeem stations. These royalties are over and above the payments received from BP under the current contract.

The transaction will help Clean Energy to expand its customer-base at the same time encourage customers to shift to renewable energy which will help in the reduction of greenhouse gas emissions.

The exact closing date of the transaction has not been disclosed; however, the transaction is subject to regulatory approvals and closing conditions.
Stock Performance

BP P.L.C.'s stock is trading slightly up by 0.91%, closing Wednesday's session at $34.23 on volume of 7.41 million shares. The company's shares surged 24.15% in the last twelve months. Additionally, the stock has advanced 3.56% in the last six months. The Company's shares have a dividend yield of 6.95%. At Wednesday's closing price, the stock's net capitalization stands at $111.57 billion.

At the close of trading session on Wednesday, March 01, 2017, Clean Energy Fuels' stock price surged 16.73% to end the day at $2.86. A total volume of 9.91 million shares were exchanged during the session, which was above the 3-month average volume of 1.63 million shares. The stock currently has a market cap of $402.34 million.

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SOURCE: Active Wall Street