Vancouver-based natural-gas engine developer Westport Innovations Inc. reported a Q4 2012 net loss of $37.6 million and a FY 2012 net loss of $98.8 million. Its joint venture with Cummins Inc., Cummins Westport Inc., delivered 2012 revenue of $353.6 million, exceeding its own guidance of $340-350 million. The company’s various joint ventures performed better, including Cummins Westport Inc. (2012 net revenue of $198.0 million, +21% year-over-year) and Weichai Westport Inc. ($272.1 million, +148% year-over-year.)
Westport Innovations develops alternative fuel, low-emissions technologies and manufactures engines that operate on compressed natural gas, liquefied natural gas, hydrogen, and biofuels, e.g., landfill gas. Its operating divisions focus on light-duty automotive systems, components, and engines; and natural gas-enabling technology for the heavy-duty diesel engines.
Its technologies are the basis of several development programs with OEMs like General Motors Corp. and Cummins Inc.
"There has been a transformational shift in the opportunity for natural gas solutions for transportation," stated Westport CEO David Demers. "Global infrastructure partners and original equipment manufacturers covering multiple platforms are signing up to develop natural gas products with Westport. As a result of this shift, we realigned our business units to focus on product sales and marketing, while expanding on corporate and technology development investments."
Despite the loss in revenue, Westport said its various product lines expanded over the reporting period, and it said it expects the growth continue, “considerably.” However, to promote product commercialization strategy Westport it has realigned its programs into new business units. These are: Westport Applied Technologies, On-Road Systems, New Markets and Off-Road Systems, and Corporate and Technology Investments.
Joint ventures, like the Westport Cummins venture, will continue to be reported separately.
Future prospects
The Cummins joint venture was a revenue highlight for 2012, but the developer indicated it has two new OEM partners in line to develop natural gas engines using Westport’s proprietary high-pressure direct injection (Westport HPDI) technology. It declined to name the prospective partners or to detail the engine designs, for competitive reasons. However, under the terms of the development programs, each partner will contribute resources and pay its respected employees and costs during the initial phases.
Westport also listed several developments in natural-gas infrastructure over the past year that are supporting its growth projections.
A company called Clean Energy Fuels has been developing the America's Natural Gas Highway with liquefied natural gas (LNG) and compressed natural gas (CNG) fuelling stations along major interstate trucking corridors. Shell and its affiliates signed a MOU with TravelCenters of America LLC to sell LNG to heavy-duty road transport customers in the U.S. through TA's existing nationwide network of full-service fuelling centers.
Fuel suppliers like Encana, FortisBC, and Gaz Metro built permanent LNG refueling stations for Westport 15L fleets. And, Conoco Phillips indicated an interest in building a small-scale natural gas liquefaction plant to produce up to 100,000 gal/day of LNG to supply truck fleets in the Dallas-Fort Worth market.
In the EU, major gas companies, vehicle OEMs, and natural gas vehicle (NGV) associations established the Blue Corridor initiative to expand the NGV fueling station network in Europe. This €16-million project is funded by the European Commission and 28 project partners.
Also, in January, the European Commission revealed measures to promote building alternative fuel stations across Europe.
