Volvo's last foray into natural gas technology came back in 2006 when the company introduced its V70 Multi-fuel prototype at Challenge Bibendum in Paris. The vehicle's ability to run on five distinct fuels was remarkable for its day, but the Multi-fuel and other Volvo vehicles that utilized either natural gas or biogas would not stay around for long.

Now that the market for natural gas or biogas vehicles has grown, Volvo is now ready for round two. Volvo Powertrain has partnered with Westport to develop natural gas and biogas engines for use in upcoming Volvo products. Details of the agreement are murky, but Westport has provided some very basic info:
  • Westport and Volvo will mutually agree on the priority for commercial launch of gaseous fuel engines and will share the risks of development.
  • For products requested by Volvo, Westport will be reimbursed for engineering and related development costs at passage through each successful major development gate.
  • Westport will arrange for or supply gas-related components.
  • Westport expects to generate revenue on each new natural gas/biogas engine sold.
More details should emerge as the development of natural gas and biogas engines progress. For now, you can hit the jump for a smidge of additional info on the Volvo-Westport agreement.

[Source: Westport]



PRESS RELEASE

Westport Signs New Development and Commercialization Agreement; New Agreement Further Demonstrates Westport's Commitment and Ability to Develop Competitive Biogas and Natural Gas Engines and Outlines R&D Expenses and Revenue Stream

VANCOUVER, BC – Westport Innovations Inc. (TSX:WPT / NASDAQ:WPRT), a global leader in alternative fuel, low-emissions transportation technologies, today announced that Volvo Powertrain, a subsidiary of Volvo AB, and Westport have signed an agreement defining Westport's responsibility to develop biogas- and natural gas-fuelled engine products for Volvo. For competitive reasons details of the products or markets will not be disclosed until an appropriate time. The main features of the long term relationship are as follows:
  • Westport and Volvo will mutually agree on the priority for commercial launch of gaseous fuel engines and will share the risks of development.
  • For products requested by Volvo, Westport will be reimbursed for engineering and related development costs at passage through each successful major development gate.
  • Westport will arrange for or supply gas-related components.
  • Westport expects to generate revenue on each new natural gas / biogas engine sold.
"Our development and commercialization program with Volvo continues to develop, both in scale and scope" said David Demers, CEO of Westport Innovations. "Natural gas and biogas are quickly becoming the alternative fuel of choice for commercial vehicles and we expect this will lead to a new generation of clean, low-emission engines from Volvo. As a world leader in innovation and quality, Volvo is a great partner to work with to capture such a burgeoning market opportunity."

The current natural gas engine development program will result in an engine that will meet future emission requirements and be commercialized according to a mutually agreed timeline. Westport will also be working directly with the Volvo AB brands to help identify market development opportunities and assist in the infrastructure build-out of biogas and natural gas where needed.

Westport originally entered into an agreement with Volvo in November, 2009, describing Westport as a Tier 1 Development Supplier for its heavy-duty natural gas engines and associated supply chain. This new agreement has evolved from the previous agreement noted.

About Westport Innovations Inc.
Westport Innovations Inc. is a leading global supplier of proprietary solutions that allow engines to operate on clean-burning fuels such as compressed natural gas (CNG), liquefied natural gas (LNG), hydrogen and biofuels such as landfill gas. The Westport HD System, comprised of the GX engine and LNG system for heavy-duty Class 8 trucks, offers class-leading emissions and allows trucking fleets to move to lower-cost, domestically available natural gas. Cummins Westport Inc., Westport's joint venture with Cummins Inc., manufactures and sells the world's broadest range of low-emissions alternative fuel engines for commercial transportation applications such as trucks and buses. BTIC Westport Inc., Westport's joint venture with Beijing Tianhai Industry Co. Ltd., manufactures and sells LNG fuel tanks for vehicles. Westport's joint venture with Weichai Power focuses on the development and commercialization of Weichai engines with Westport HD systems. Westport's Juniper Engines Inc. offers liquefied petroleum gas (LPG) and natural gas engine solutions for light-duty applications such as forklifts and automotive. To learn more about our business, visit our website or subscribe to our RSS feed at www.westport.com, or follow us on Twitter @WestportWPRT.