Westport Innovations Inc. (WPT:TSE) has announced that is has begun a co-operative technology development project with MAN Nutzfahrzeuge AG of Munich, Germany, one of the largest manufacturers of medium and heavy trucks in Western Europe.

Under a one-year agreement between the two companies, Westport will design and test a high-performance natural gas fuel system for a MAN 12-litre diesel truck and bus engine. Westport expects that the MAN engine using Westport technology would comply with European emission standards and would allow commercial fleet operators to realize significant savings on fuel costs because natural gas is less expensive than diesel fuel.

"This agreement with MAN Nutzfahrzeuge represents a broadening of Westport's development alliances involving natural gas fuel systems for vehicular diesel engines," said David Demers, Westport's President and Chief Executive Officer. "Our alliance with MAN gives us further confidence that Westport technology will quickly penetrate worldwide markets as engine manufacturers grow to understand its potential."

Among other requirements, the co-operative program calls for MAN Nutzfahrzeuge to provide the engine, assist with the technology program and develop a worldwide market study for a proposed natural gas engine product. If the program successfully proves the benefits of Westport's natural gas fuel system, the two companies would negotiate a business plan to exploit the technology.

Westport's proprietary natural gas fuel system technology reduces emissions while retaining the high performance, power and fuel efficiency of the traditional diesel engine. Westport's strategy is to develop and commercialize its natural gas technology for diesel engines through key strategic alliances with original equipment manufacturers (OEMs).

MAN Nutzfahrzeuge is a unit of the Munich-based holding company MAN AG, which recently reported sales of approximately US$12.5 billion for the year ended June 30, 2000. MAN AG has more than 74,000 employees worldwide. MAN Nutzfahrzeuge is the third multi-national OEM with which Westport is cooperating on technological development. The other two OEMs are Cummins, Inc. of Columbus, Indiana and Ford Motor Company of Dearborn, Michigan.