Westport launches a new product to serve the natural gas needs of the North American railroad market

— Photo courtesy CN

Westport Innovations Inc. (TSX:WPT/NASDAQ:WPRT), today announced the launch of a liquefied natural gas (LNG) tender product solution with an order for four tenders from Canadian National Railway (CN) (TSX:CNR) (NYSE:CNI). The first tender to supply fuel to an adjacent natural-gas powered locomotive will be delivered in the fourth quarter of 2013.

"There is growing consensus around the enormous potential of using LNG as a fuel for locomotives and there is a clear path for the industry to achieve this shift to a cleaner, cheaper and domestically available fuel," said Nicholas Sonntag, executive vice-president at Westport. "The Westport LNG Tender leverages our substantial expertise in LNG storage, cryogenic systems, and natural gas fuel delivery for mobile applications to create a product that will immediately help railroads to validate the value of LNG in their operations today, with a built-in upgrade pathway to the next-generation locomotives coming over the next few years."

Putting the LNG on a Westport LNG Tender, rather than simply replacing the diesel fuel tanks on existing locomotives, offers a number of advantages:

More than 10,000 gallons LNG capacity—provides longer range than a diesel locomotive, reducing the need for LNG refuelling infrastructure and refuelling stops Intelligent fueling controls will allow tenders to supply fuel to natural gas locomotives from virtually any manufacturer, reducing operational complexity and investment in different proprietary fuel supply solutions Each tender can support two locomotives, reducing the capital investment required to move to LNG Utilizes an industry standard vehicle design and 40' LNG ISO tank, which minimizes cost and will allow production volumes to be rapidly increased as the industry migrates to LNG. "CN is testing natural gas locomotives and Westport's experience in providing LNG solutions for transportation makes it the natural partner for us," said Gerry Weber, CN Vice-President Supply, Fleet and Fuel Management. "These tenders will be used immediately with our dual fuel locomotives in mainline service, allowing CN to continue to explore this technology as a means to advance the company's sustainability agenda and improve environmental emissions."

Westport is collaborating with INOXCVA, a leading manufacturer of cryogenic transportation equipment, on these tenders. Westport and INOXCVA have entered into an agreement for cryogenic systems to be able to rapidly meet the near-term demand in the rail industry.

Westport has also been collaborating with Caterpillar Inc. (NYSE:CAT) since June 2012 to co-develop natural gas technology for Caterpillar products, including the next generation of locomotives. The first high pressure direct injection (HPDI) locomotive will be demonstrated in 2014 through a consortium program funded by Sustainable Technology Development Canada in partnership with Canadian National Railway, Electro-Motive Diesel (EMD, a subsidiary of Progress Rail Services, a Caterpillar company), and Gaz Metro. Caterpillar and Westport are combining technologies and expertise, including Westport™ HPDI technology and Caterpillar's industry leading off-road engine and machine product technology, to develop these new natural gas products. Commercial production of HPDI locomotives by EMD is expected in 2017.