Adsorbed natural gas technology developer Energtek Inc. (OTCBB: EGTK) announced that it has signed a purchase contract with the Philippine National Oil Company Exploration Company (PNOC-EC) for natural gas extracted from the San Antonio stranded gas well in the Filipino province of Isabela.
The deal allows the company to begin implementing the first phase of a project to convert 3,000 three-wheelers (“tricycles”) in Isabela to natural gas, and to supply the natural gas for those vehicles. This is the world’s first commercial ANG project.
This phase of the project is worth about $11.2 million. Revenues from vehicle equipment sales from this initiative are expected to gross more than $1.2 million, and ongoing natural gas sales are projected to exceed $2 million annually.
Energtek CEO Lev Zaidenberg said, "We are now moving from the status of start-up to a commercial company".
Energtek employs proprietary hi-tech storage technology to supply natural gas to small vehicles.
The purchase contract enables Energtek to implement its business model as a commercial distributor of natural gas in emerging markets across Southeast Asia.
The Isabela project is the first part of Energtek’s plan to convert over 50,000 tricycles during the next 18 months, which would generate projected revenues of over $20 million in vehicle equipment sales and $40 million in ongoing annual gas sales. Implementation of this plan is primarily dependent on the timetable for attainment of sufficient natural gas supplies.
Zaidenberg also said that the company's profit expectations are based on being able to acquire natural gas at a below-market price, which allows it to profit even when selling the natural gas at a reduced price.
Energtek aims to fulfill the government’s request to convert over 500,000 three-wheelers within the next three to four years.
“The Filipino government under the leadership of President Gloria M. Arroyo has recognized the need to urgently reduce dependence on oil and gasoline,” said Executive Secretary of the Philippines, Hon. Eduardo R. Ermita.
Energtek is also engaged in advanced negotiations for natural gas from a stranded gas well in the Filipino province of Cebu.
Natural gas can be provided to drivers for dramatically less than the cost of equivalent gasoline. Its use as a motor fuel drastically reduces harmful vehicle emissions.
“Today, a local driver in the Philippines can spend $1500 or more per year on gasoline,” said Lev Zaidenberg, CEO of Energtek. “Energtek’s proprietary ANG technology can enable drivers to use a clean and abundant motor fuel that reduces annual fuel costs by several hundred dollars. These fuel savings can increase local residents’ working income by as much as forty percent.”
Published by Globes [online], Israel business news - www.globes-online.com - on July 24, 2008
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