Energy supplier UGI Energy Services (UGIES) and renewable natural gas (RNG) producer Archaea Energy have formed a joint venture (JV) to develop a RNG project at the Commonwealth Environmental Systems landfill in Hegins, Pennsylvania.
UGIES is a subsidiary of energy distribution company UGI, while Archaea is a subsidiary of oil and gas giant bp (historically known as British Petroleum).
The JV, called Aurum Renewables, will be 60-percent owned by Archaea subsidiary Archaea Holdings and 40-percent by a subsidiary of UGIES.
“This project represents a meaningful step forward for UGI,” said Robert F. Beard, Chief Operations Officer, UGI. “Demand for RNG is growing, as more individuals and businesses look for an energy source that is safe, cost effective and environmentally friendly. Additionally, the investment in Aurum supports the company’s existing greenhouse gas emission reduction plans that are highlighted in our latest environmental, social and governance report.”
As part of the agreement, UGIES will provide its existing 11-MW landfill gas-to-electricity facility, while Archaea will lead the development, engineering, construction and operation of the new RNG facility.
The completed project is expected to generate about 5,000 MMBtu per day of pipeline-quality RNG. UGIES will spearhead the marketing of the RNG produced by the facility.
“This new RNG facility will be one of the largest in the Archaea portfolio and is expected to bring significant environmental and social benefits to southeast Pennsylvania communities," said Brian McCarthy, Chief Financial and Commercial Officer of Archaea. "This new facility will also bring global benefits by reducing greenhouse gas emissions and providing a domestically-produced, affordable, low-carbon source of energy."
Global oil and gas producer BP acquired Archaea in a $4.1 billion deal last year.
Through subsidiaries, UGI operates natural gas and electric utilities in Pennsylvania, natural gas utilities in West Virginia, and distributes LPG both domestically (through AmeriGas) and internationally (through UGI International). It also manages midstream energy assets in Pennsylvania, Ohio, and West Virginia and electric generation assets in Pennsylvania.