UPDATE 1-Clean Energy, GE Capital to finance natgas truck purchases
LOS ANGELES Oct 21 (Reuters) - Shares of Clean Energy Fuels Corp rose 4.5 percent on Monday after the company said it had struck a deal with GE Capital that will help companies finance purchases and leases of pricey natural gas-fueled trucks.
Clean Energy, which provides natural gas fuels for transportation, said that under the terms of the agreement, truck fleet operators must clinch natural gas fueling contracts with Clean Energy and then will be able to apply for loans and leases from GE Capital.
Newport Beach, California-based Clean Energy then said it will help offset the monthly cost of a natural gas truck to make it comparable to the cost of a diesel truck.
Natural gas costs about $1.50 less per gallon than diesel or gasoline, according to T. Boone Pickens-backed Clean Energy.
Greenhouse gas emissions from natural gas trucks are about 20 percent lower than those of diesel trucks. But truck companies must fork over an extra $40,000 to $80,000 per natural gas truck. A heavy-duty diesel truck starts at about $100,000.
"You've removed that upfront capital differential that still favors diesel right now," said Ascendiant Capital analyst Carter Driscoll, who has a "buy" rating on Clean Energy shares. "If you've removed that upfront hurdle you are talking about pure operating savings."
Almost a year ago, Clean Energy Fuels said it would buy two small LNG plants from GE's oil and gas unit. GE will provide up to $200 million in financing for those plants. GE Capital is a unit of General Electric Co.
Clean Energy shares were up 52 cents, or 4.5 percent, at $12 in afternoon trading on the Nasdaq.
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