"This is a significant opportunity that has the potential to transform important segments of the global off-road equipment industries," said David Demers, CEO of Westport Innovations.  "The substantial price difference between natural gas and diesel fuel is resulting in a strong financial incentive to enable off-road applications to take advantage of low natural gas energy costs without sacrificing operational performance. There is also a clear environmental incentive because of the reduced carbon emissions.  Adding to the solid business case for this program is the potential to convert existing field units to natural gas - opening up a whole new market opportunity."

While the agreements initially focus on engines used in mining trucks and locomotives, the companies will also develop natural gas technology for Caterpillar's off-road engines, which are used in a variety of electric power, industrial, machine, marine and petroleum applications worldwide.

"This agreement does more than pair two leaders in their respective industries," said Steve Fisher, vice president of Caterpillar's Large Power Systems Division. "Many of our customers are asking for natural-gas powered equipment in order to reap the financial and environmental benefits. The program positions Caterpillar to become the first manufacturer to bring Westport HPDI technology to the high horsepower off-road market, offer the broadest product line of natural gas-fueled machines and equipment, and capitalize on the attractiveness of natural gas as an alternate mobile fuel - all within the shortest time frame for our customers."

"This is a true win-win for our customers and the environment," said Billy Ainsworth, President and CEO of Electro-Motive Diesel, a subsidiary of Progress Rail Services, which will develop the natural gas-powered locomotives. "As a part of Caterpillar, we have the ability to be on the forefront of developing cutting-edge solutions for our industry, and we look forward to continuing those advancements for years to come."

Development programs will start immediately for both new and existing engines, combustion technology and fuel systems. Commercial production is expected to begin in about five years.

Source: Westport Innovations Inc.