Westport Innovations (Nasdaq: WPRT) is a unique play that doesn't have to extract natural gas from the earth to make money. It can do so through its innovative technology that allows gasoline engines to run on natural gas.

2011 was an outstanding year for the company, with its stock price shooting up more than 50%. Could 2012 be another bumper year for Westport? It's possible. Here's what you need to watch closely.

Big deals = Higher hopes
Westport's progress in 2011 paves its confident entry into 2012. Quite a few big companies joined hands with Westport last year to try out its innovative technology. What you should note is how automakers and trucking players are showing greater faith in Westport's technology; and this is exactly what can take Westport far.

General Motors (NYSE: GM) chose Westport to design engines for its light-duty vehicles, and Ford Motors (NYSE: F) joined up to get its pickup trucks powered by Westport's new and advanced bi-fuel system.

I wouldn't be surprised if Westport's kitty gets heavier this year with more such deals. One automaker's intuition can provide the lead to others, too. The bottom line is, this slow yet steady acceptance of natural gas engines is welcome news for Westport, and a trend that needs to be watched closely.

What fuels the optimism further is the faith trucking giants like Caterpillar (NYSE: CAT) are putting in the natural gas technology. The bellwether teamed up with Westport last year to use its technology in larger heavy-duty engines -- could this be a precursor to future initiatives by similar companies? I am going to follow all such deals closely this year; you should as well.

But if you think Westport will be looking out for automakers alone, think again. Because oil giants are also giving out signals, that could turn out to be a boon in disguise for Westport.

"Oily" opportunities
Westport's joint marketing agreement with Royal Dutch Shell (NYSE: RDS-A) to extensively market liquefied natural gas as a viable alternative transportation fuel. This could be the signal for big oil companies warming up to Westport's innovative technology.

Do not take your eyes off the ACT
While deals are flowing through, all nat-gas lovers will have their eyes fixed on the one act in 2012 that could be the "make-or-break" for Westport -- the NAT GAS Act.

Last year was rife with the will-it-or-won't-it pass speculations. But just before the year drew to an end, the Senate introduced its version of the bill in the House in November backed by bipartisan support. The bill still has some distance to cover, and it may not be a smooth and quick run for it to the president's desk, but the November development has raised hopes among many who are expecting the NAT GAS Act to pass eventually.

Mind you, this act could be the biggest blessing for Westport if it passes through. The fact that big-shot investors like George Soros put in more money in Westport some months back has fueled the possibility of the passage of the act even more. I am sure something will brew for the act this year -- what will it be is the question to be closely followed.

The Foolish bottom line
Westport's books might still be replete with red, but its technology could take the world by storm. Profits may play a hide-and-seek game for some more time, but if the NAT GAS Act passes, it will likely help Westport's shares. The great part is, while we wait for the fate of the NAT GAS Act, Westport is likely to be busy bagging more deals in 2012.

Westport looks to be on track to have a great year. If you'd like to take a look at a different stock that our chief investment officer picked out for explosive growth in 2012, check out The Motley Fool's brand-new report, "The Motley Fool's Top Stock for 2012." It highlights a company that is revolutionizing commerce in Latin America. You can get instant access to the name of this company by clicking here -- it's free. 

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