RISING fuel prices and increasing fears about air pollution are proving a boon for Advanced Engine Components (ACE), which builds engines that run on natural gas.
Perth-based ACE has signed a deal in Indonesia to build and deliver a compressed natural gas (CNG) engine, with a sales value of $425,000, to PT Arimbi Jaya (AJA), a truck and bus reseller and operator.
The agreement complements ACE's operations in China and Thailand.
The order, to be delivered by June 30, brings to 65 the number of CNG engines AJA has bought from ACE this year.
ACE managing director Tony Middleton said AJA was comparing CNG engines, with the aim of placing a further $2.2 million order with ACE soon. AJA is building its own CNG refuelling plants.
Indonesia's abundant natural gas reserves, about three times the size of Australia's, are Asia's largest.
Mr Middleton said that for some years CNG had been unable to compete with diesel in Indonesia. But this had rapidly changed with oil price rises and Indonesia's commitment to improve air quality in Jakarta.
Indonesia's major fuel suppliers, Pertamina, Petronas and Shell Indonesia, have begun supplying CNG from their retail stations. CNG became available for buses last year.
ACE has expanded from its base in Australia and initial sales in Europe to concentrate on Asia. It runs 600 natural-gas buses in France, plus 35 in Perth and a few more in Adelaide and Canberra.
ACE has signed agreements with three big Chinese producers of bus and truck engines — First Autoworks, Weichai and Dong Feng.
ACE also supplies its Chinese-made engines to Thailand, where it has a joint venture. ACE shares yesterday closed fractionally higher at 15¢.
ACE Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
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