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UGI invests in additional RNG projects in South Dakota

UGI invests in additional RNG projects in South Dakota
MBL Bioenergy is developing three dairy farm renewable natural gas (RNG) clusters in South Dakota (image courtesy UGI).

In the United States (US), UGI Corporation (UGI) has announced an agreement with MBL Bioenergy LLC to develop its second and third clusters of dairy manure waste into renewable natural gas (RNG) projects in South Dakota (SD).

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In total, these additional projects will represent approximately US$150 million of investment by MBL Bioenergy, of which 100 percent of the funds will be provided by UGI Energy Services, LLC (UGIES), a subsidiary of UGI.

MBL Bioenergy is a joint venture partnership between UGIES, Sevana Bioenergy LLC, and a subsidiary of California Bioenergy (CalBio) with the sole purpose of developing RNG projects in South Dakota (SD).

This project sets a new standard for UGI in terms of scope and size and represents a key milestone in UGI’s investments in RNG projects, said Robert F. Beard, Chief Operations Officer, UGI.

Three clusters in South Dakota

The partnership announced its Moody RNG cluster project in Sioux Falls, South Dakota, in May 2022.

The second cluster project, Brookings, will be built at three farms located near Estelline, South Dakota, and is expected to generate approximately 300 million ft3 of RNG annually once completed in the calendar year 2024.

Dairy waste from the farms will be anaerobically digested, producing biogas which will then be piped to a biogas upgrading facility before it is delivered into the local natural gas distribution system.

The third cluster project, Lakeside, will be built at two farms located near Summit, South Dakota, and is expected to generate approximately 225 million ft3 of RNG annually once completed in the calendar year 2024.

Similar to the second cluster, dairy waste from the farms will be anaerobically digested and biogas piped to a gas upgrading facility before it is delivered into the local natural gas distribution system.

This expansion of our partnership with UGI is another important step forward in expanding our carbon-negative renewable natural gas business. Our dairy methane capture and refining projects are delivering significant environmental benefits, improving economics for dairy farm partners, and supplying a clean-burning diesel replacement fuel said N. Ross Buckenham, CEO of CalBio.

UGIES, through its wholly owned subsidiary, GHI Energy, will be the exclusive marketer for MBL Bioenergy for these projects.

Sevana values this commitment to expand our partnership and engage South Dakota dairy farmers and communities to benefit the local economy and environment. We are excited to build a value chain of strong relationships to decarbonize transportation fuels and significantly reduce greenhouse gas emissions. Sevana’s team of biogas experts is deploying state-of-the-art renewable energy technology across multiple RNG projects in agricultural communities, said Steve Compton, President of Sevana.

We are pleased to be partnering with industry-leading developers on this project that will substantially reduce greenhouse gas emissions, using dairy RNG as a vehicle fuel. In May of 2022, UGI committed over US$70 million of investment to fund the Moody cluster of three dairies. The Moody cluster is now well into construction and is anticipated to be online in late 2023. We look forward to making additional investments in our MBL partnership as we advance the use of RNG as an environmentally responsible and clean energy solution, Robert F. Beard said.

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