TUALATIN, Ore., Aug. 14, 2012 /PRNewswire/ -- CUI Global, Inc. (NASDAQ: CUI), a platform company dedicated to the acquisition, development, and commercialization of new, innovative technologies, today announced it has signed, through its international distribution partner BWG-Blue Flame, a Memorandum of Understanding (MOU) with Fermaca International, S. de R.L. de C.V., a sociedad de responsabilidad limitada de capital variable (Fermaca) for distribution of its patented Vergence™ Natural Gas Metering Device in the country of Mexico.
The MOU obligates Fermaca to purchase a "minimum initial order" of 200 units, valued at $5,000,000 (based on MSRP), following the successful completion of a thirty (30) day test of one device at Fermaca's facilities in the industrial zone of Toluca. In order to pass the test, the device must meet the +/-0.5% accuracy standard set forth in the American Gas Association ("AGA") Section 5 Standard, a standard the device has met or exceeded in all previous testing.
For more than 40 years, Fermaca has played a leading role in the development and construction of infrastructure in several of Mexico's key industries including the energy sector. ( http://fermaca.com.mx/Fermaca%20Ingles/home.html). Fermaca was recently awarded the contract from Mexico's state power company, CFE, for operation of the 385km Chihuahua Corridor gas pipeline that will transport gas from the US for power generation in Chihuahua, Durango and Coahuila states. Fermaca presented the winning bid of US$310,000,000 to CFE through its subsidiary Tarahumara Pipeline. ( http://www.bnamericas.com/news/electricpower/fermaca-subsidiary-wins-us310mn-pipeline-contract1).CUI Global's president & CEO, William Clough, commented, "This Memorandum of Understanding continues our strategy of providing a test device to qualified parties if, and only if, that party agrees and is obligated to issue purchase orders and purchase a minimum number of our GasPT2 units immediately upon successful completion of the test." "Previously, we had to provide the devices without such an obligation because of the new, unproven nature of the technology. Now, as a result of our successful testing in Italy at Snam Rete; in Poland with GazSystems; with Ofgem in the United Kingdom; and with Gasunie in The Netherlands, we are able to insist on confirmed purchase orders before we provide a test device," Clough continued. "Significantly, this MOU also represents our first successful venture under the terms of our recently announced International Distribution Agreement with BWG-Blue Flame. It is the beginning of what I believe will be a very long and valuable relationship between CUI Global and BWG-Blue Flame," Clough concluded.