Chesapeake Energy, the second-largest U.S. natural gas producer, has formed a $1 billion fund aimed at investing in companies that develop equipment and technology that foster increase use of natural gas as a transportation fuel. The Oklahoma-based company has already outlined a pair of investments.
Chesapeake (CHK) will acquire half of privately held Sundrop Fuels for $155 million. Sundrop plans to build a plant to convert gas and waste products into motor fuel, according to Bloomberg News. Chesapeake will also invest $150 million over three years on bonds issued by Clean Energy Fuels (CLNE), the natural gas service station operator in which legendary energy investor T. Boone Pickens owns a sizable stake.
California-based Clean Energy Fuels will use the investment to add about 100 new fueling stations on major highways, Bloomberg reported. Sundrop has already received financial backing from Oak Investment Partners and venture capital firm Kleiner Perkins Caulfied & Byers.
Dow component Exxon Mobil (XOM), the largest U.S. oil producer, is also the largest U.S. natural gas company.
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