Natural gas engine manufacturer Westport Innovations Inc. (TSX:WPT) has signed an agreement to develop biogas and natural gas-fuelled engine products for Volvo.
Westport, which is based in Vancouver, would not disclose details of the products or markets, but said it and Volvo would share the development risks.
The company will be reimbursed for engineering and related development costs upon meeting certian milestones, Westport said, and will generate revenue on each engine sold.
David Demers, Westport’s CEO, said: “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.”
The company said the new agreement was the result of a 2009 deal between the two companies where Westport agreed to supply heavy-duty natural gas engines.
Westport’s share price was up 4.6% to $17.22 in midday trading Tuesday.
The last time BIV caught up with Westport, shareholder and billionaire oilman T. Boone Pickens was lobbying for legislation to boost the growth of the U.S. gas-powered vehicle market. (See “Vancouver-based natural gas engine maker gets the T. Boone Pickens bump” – issue 1069; April 20-26, 2010.)