3M and Chesapeake Energy team up on nano-particle resin for CNG tanks

For a mature company, the weekly chart of 3M (NYSE: MMM) stock still looks healthy; and collaboration with Chesapeake Energy Corp. (NYSE: CHK) to design, manufacture, and market a portfolio of compressed natural gas (CNG) tanks for use in various transportation sectors in the U.S. is making the stock look even better.

It is merely a matter of time before the natural gas industry will avail enough energy to the commercial trucking fleets that it will surely reduce America’s over-dependence on foreign oil. Next target will be automobiles, as the infrastructure will avail more filling stations based on the commercial trucks alone.

That brings us to the next level of investment aside from the commodities. 3M (NYSE: MMM), a material-based company, and Chesapeake Energy Corp. (NYSE: CHK), an energy company, are collaborating to design, manufacture, and market a portfolio of compressed natural gas (CNG) tanks for use in various transportation sectors in the U.S.

Chesapeake Energy has already pledged an initial $10 million via Chesapeake NG Ventures Corp. (CNGV), established in 2011 to identify and invest in companies and technologies that will replace the use of gasoline and diesel. The funds are directed toward design and certification services, market development support, and a commitment to use the new tanks for its own corporate fleet conversion to CNG. CNGV has also committed $1 billion over the next 10 years to help fund various initiatives to increase demand for natural gas, including investments totaling $300 million in Clean Energy Fuels Corp. and privately held Sundrop Fuels Inc.

3M Technology

For the record, high-pressure gas tanks have always been expensive and heavy. In fact, currently the fuel tank on a CNG vehicle is its most expensive single component. So, new CNG tanks will have to reduce costs while increasing performance.

That will certainly be met as 3M expects to offer a range of CNG tanks that are 10 to 20% lighter with 10 to 20% greater capacity compared to standard vessels as well as provide up to 40% savings on a cost per liter basis.

All this will be possible through innovations in design, process technology, materials, and capacity optimization. In the case of 3M’s CNG tank solution, the combination of the company’s proprietary liner advancements, thermoplastic materials, barrier films and coatings, and damage-resistant films will make it possible; but wait, there is more. Using nanoparticle-enhanced resin technology, 3M Matrix Resin for Pressure Vessels, the company expects to create CNG tanks that are 10 to 20% lighter with 10 to 20% greater capacity compared to standard vessels.

You may not realize it, but the 3M Matrix Resin has already been employed in multiple applications over the past two to three years. Applications include a range of diverse products from fishing rods and hockey sticks to marine masts and aerospace panels.

For the record, 3M has an array of products beyond this of course. And any investment today must also take those product potentials into consideration. Nonetheless, this new arena avails an area that 3M has not played before; and that implies new business for what is considered a mature company.

3M Stock Chart

The weekly chart shows a bullish pattern that make you wonder how you may have missed this investment. Fact is, we often miss the obvious as we are inundated with the so-called next new thing; when, in reality, the old companies haven’t given up on life or creating new products. One such company is 3M (NYSE: MMM) which is trading just above $88.

The chart also shows major overhead resistance at the broken support level of 90.19 and a double top at 98. On the downside, support can be found at 83.10, a broken resistance level on this latest upward swing. Then there are the weekly swing lows of
77.51; 75.29; and at the major low of 68.63 from Oct. 2011.