UGI agrees to fund its largest ever natural gas project

UGI Energy Services (UGIES) has announced an agreement with MBL Bioenergy to fully fund the first set of renewable natural gas (RNG) projects currently under development in South Dakota.

In total, the project will represent over $70 million of investment by MBL Bioenergy, of which 100 percent of the funds will be provided by UGI. MBL Bioenergy is a joint venture partnership between UGIES, Sevana Bioenergy and a subsidiary of California Bioenergy (CalBio) with the sole purpose of developing RNG projects in South Dakota.

The first set of projects, known as a cluster, will be built at three farms located north of Sioux Falls, SD, and is expected to generate approximately 300 million cubic feet of RNG annually once completed in 2024.

Dairy waste from the farms will be anaerobically digested and then piped to a central upgrading facility before it is delivered into the interstate natural gas system near Dell Rapids, SD. UGIES, through its wholly-owned subsidiary, GHI Energy, will be the exclusive marketer for MBL Bioenergy.

“This project sets a new standard for UGI in terms of scope and size and represents a huge milestone in UGI’s investments in, and expected earnings contribution from, RNG projects,” said Robert F. Beard, executive vice president - Natural Gas, Global Engineering, Construction & Procurement, UGI. “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. 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.”

“This partnership with UGI is another positive step forward in expanding our carbon-negative renewable natural gas business,” added N Ross Buckenham, CEO of CalBio. “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. Through our subsidiary, Midwest Bioenergy LLC, this joint venture with UGIES, a new, powerful and committed strategic partner, anchors our dairy RNG expansion into the Midwest and will significantly expand our fuel production.”

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