Ark Energy Gives Initial Approval to Buyout by Tenneco Subsidiary : Deal: Houston-based firm plans to keep the Laguna Hills company’s 35 employees and expand its operations.

Ark Energy Inc., a 5-year-old developer of cogeneration plants, said Thursday that it has tentatively agreed to be acquired by a subsidiary of giant Tenneco Inc. for stock worth $60 million.

The Houston company’s Tenneco Gas unit plans to keep Ark’s 35 employees and expand Ark’s operations.

Cogeneration plants create both steam and electrical energy. Plants use natural gas to make steam that runs generators, which in turn create electricity. Ark sells the electricity to public utilities and the excess steam to industrial companies.

The acquisition will give Tenneco Gas, which transports and sells natural gas, a 50% interest in two Florida cogeneration projects with a total of 224 megawatts of generating capacity and an interest in eight other projects in various stages of development with a total of more than 950 megawatts of capacity.

Ark, named for Noah’s Ark, is co-owned by Arnold R. Klann, its president, and Leslie C. Confair, its chief operating officer. Each holds the positions of co-chairman and co-chief executive.

Tenneco also will form a joint venture with an Ark affiliate, Arkenol Inc., to develop environmentally safe methods for disposing of organic waste. Arkenol, for instance, is processing the straw from rice harvests in the Sacramento area into ethanol for fuel and into sodium silicate for use in a variety of products from rubber to soap.

At other locations, Arkenol combines the steam byproduct of cogeneration with its proprietary technology to convert other cellulose refuse, such as paper and grass clippings, into ethanol and other specialty chemicals.

“Arkenol is a green company that develops what I like to call biorefineries,” said Klann, the affiliate’s sole owner. “We produce mainly ethanol.”

He said Confair will join the staff of 15 at Arkenol once the sale of Ark Energy is completed in about 45 days.