Gevo, Inc. announced that its wholly-owned dairy manure-based renewable natural gas project company located in northwest Iowa, Gevo NW Iowa RNG, LLC, has signed binding, definitive agreements with BP Canada Energy Marketing Corp. and BP Products North America Inc. for the sale of NW Iowa RNG’s production.
The project is currently being constructed and is expected to commence production in early 2022. Upon project completion, NW Iowa RNG is estimated to produce approximately 355,000 MMBtu of biomethane per year. The fuel is expected to be sold into the California market under dispensing agreements bp has in place with Clean Energy Fuels, the largest fueling infrastructure in the U.S. for renewable natural gas.
It is anticipated that NW Iowa RNG will benefit from environmental product revenues under California’s Low Carbon Fuel Standard (LCFS) program and the U.S. Environmental Protection Agency’s (EPA) Renewable Identification Number program.
Beginning in late 2022 upon stabilized operations and pathway certifications of its environmental products, NW Iowa RNG is expected to generate cash distributions to Gevo of approximately $9 to $16 million per year. Starting in 2024, Gevo will have the right to use a portion of NW Iowa RNG’s production as process energy at its Net-Zero 1 Project or other production facilities, including future Net-Zero projects.
“Renewable natural gas is proving to be a key fuel in the energy transition. bp has a value chain that allows renewable natural gas to reach the transportation market, and it’s a pleasure to work with a company that shares our vision of a low-carbon future,” said Dr. Patrick R. Gruber, CEO of Gevo. “This is an excellent opportunity to meet the growing demand for renewable natural gas and to expand our business.”