Rå Biopark and Barents NaturGass have signed a letter of intent for the sale and distribution of biogas in Hammerfest, Norway, with the agreement framework valued at NOK 1.2 billion (€100m).
Barents NaturGass sends 2,000 truckloads of natural gas annually from Melkøya to various destinations in the North Calotte. The company supplies energy to 5,000 workplaces, including several ferry services. In the agreement with Rå Biopark, there will be co-operation on the development of a network of filling stations in Northern Norway.
The owners of Rå Biopark are all waste companies that have a clear goal of contributing to far better energy utilisation of food waste and sludge than producing compost soil. Through closed systems, Rå Biopark will produce liquid biogas equivalent to more than 5 million litres of diesel per year.
The agreement between Barents NaturGass and Rå Biopark has a duration of 10 years with options for extension. Barents NaturGass will sell all biogas to be produced in Skibotn.
The owners want to concentrate on effective treatment of the waste and have decided that sales and distribution will be outsourced to those who work with it on a daily basis.
A new biogas production plant will be established in Skibotn. The final investment decision will be made by the owners in late autumn.
The agreement marks a milestone for northern Norway's business and industry, according to Sigve Daae Rasmussen, CEO of Rå Biopark. He said the co-operation between the two companies represents both a long-term agreement on the sale and distribution of biogas, as well as an important contribution to the green shift in the north.
"We are now very close to realising a major renewable energy adventure," he said.
Sales manager of Barents NaturGass Mikael Rikstad Iversen added: "For us at Barents NaturGass, this will mean a paradigm shift where we get biogas in our product mix. Three years ago, few people were interested in using biogas in industry or in land and sea transportation. Now everybody wants it. Therefore, it is extremely important for us to be part of this exciting industrial project in the north."
Norwegian firms sign €100m letter of intent for biogas production
