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Headwaters Incorporated (HW - Snapshot Report) declared that its unit, HTI, has entered into a technology alliance with Axens, a leading provider of technologies, catalysts and services for oil refineries. The companies will share their technologies to produce clean liquid fuels from residual heavy oil.

Under the strategic alliance, HTI will offer its proprietary HCAT hydro cracking technology along with liquid catalyst precursor. Axens on the other hand, will share its H-Oil ebullated bed hydro cracking process.

The combination of the H-Oil and HCAT Technologies will allow refineries around the world and Axens H-Oil operators to convert poorer quality and lower cost crude oil feedstocks into higher-value distillates that can be further refined into gasoline, diesel and other products. The addition of HTI’s proprietary liquid catalyst precursor will offer the most advanced and commercially proven residual oil upgrading process through higher conversion levels.

The strategic alliance is in line with Headwaters’ commitment towards reducing waste and increasing the value of energy-related feedstocks, primarily in the areas of low-value coal and oil. Headwaters believes that upgradation of its technology represents a substantial improvement over the current heavy oil refining technologies.

Headwaters, which belongs to the building and construction industry along with James Hardie Industries plc. , PGT, Inc. (PGTI - Snapshot Report) and Armstrong World Industries, Inc. (AWI - Analyst Report),  reported a 42% year over year decline in its Energy Technology segment in second-quarter 2013. However, it is optimistic that revenue will improve in the remainder of the year led by a positive demand in the repair and remodel markets. The segment recorded an operating loss of $1.2 million in the reported quarter compared to $0.7 million in the year-ago quarter.

South Jordan, Ut.-based Headwaters is a diversified growth company providing building products, technologies and services to the heavy construction materials, light building products, and energy technology industries.

Headwaters currently retains a Zacks Rank #3 (Hold).

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