Shares of Rentech Inc. soared 86 percent Tuesday after the synthetic fuels developer said it signed a multiyear contract to supply eight airlines with up to 1.5 million gallons per year of renewable synthetic diesel for ground service equipment at Los Angeles International Airport.
The Los Angeles company's deal is to provide its RenDiesel product, primarily made from urban green waste such as yard clippings, beginning in late 2012 after its plant under construction in Rialto goes online. The agreement is the first of its kind to supply renewable synthetic fuels to multiple domestic airlines, according to a company statement.
Rentech said the fuel will meet clean-air targets set by California's low-carbon fuel standard.
The agreement with Aircraft Service International Group, which serves several airlines at the airport, will supply fuel to Alaska Airlines, American Airlines, Continental Airlines, Delta Air Lines, Southwest Airlines, United Airlines, UPS Airlines and US Airways.
"This commercial purchase contract among Rentech, ASIG and the airlines validates the growing demand for synthetic fuels produced by the Rentech process," Chief Executive D. Hunt Ramsbottom said in a statement. "We expect this agreement to serve as a model for future supply relationships at other airports and for other fuels, including Rentech's synthetic jet fuel, which was recently approved for commercial airline use."
Rentech shares closed up $1.11 cents, or 86 percent, to $2.40 on the New York Alternet.
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