UGI Corp. is partnering with MBL Bioenergy to develop its second and third clusters of renewable natural gas (RNG) projects in South Dakota.

Under the agreement with MBL announced Wednesday, UGI would build the second cluster dairy manure waste to RNG project called Brookings at three farms near Estelline, SD. The project is expected to generate about 300 MMcf/year of RNG once completed in 2024.

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

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The third cluster project, known as Lakeside, is to be built at two farms near Summit, SD, and would produce around 225 MMcf/year of RNG once completed. UGI also is targeting completion for this project in 2024. The process from production to delivery would be similar to the Brookings project.

“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 COO Robert F. Beard.

Beard said the project would substantially reduce greenhouse gas emissions, using dairy RNG as a vehicle fuel.

Last May UGI committed more than $70 million of investment to fund the Moody cluster of three dairies. The Moody cluster is under construction and set to be online later this year, according to the firm

UGI management expects to make additional investments in its MBL partnership “as we advance the use of RNG as an environmentally responsible and clean energy solution,” Beard said.

In total, these additional projects would represent about $150 million of investment by MBL, with all of the funds provided by UGI subsidiary UGI Energy Services LLC (UGIES). MBL is a joint venture partnership between UGIES, Sevana Bioenergy and a subsidiary of California Bioenergy LLC (CalBio) designed to develop RNG projects in South Dakota.

UGIES, through its subsidiary, GHI Energy, would be market the supply.

“This expansion of our partnership with UGI is another important step forward in expanding our carbon negative renewable natural gas business,” said CalBio CEO N. Ross Buckenham. “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.”

Sevana President Steve Compton viewed the partnership as a commitment to 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.”

RNG has been a platform for growth at UGI. In September, the company announced plans to develop its fourth RNG project at an Odessa, NY, dairy farm. That project also is scheduled to be completed in 2024.

A UGI natural gas and electric utility recently made a deal in neighboring Pennsylvania to purchase RNG from an Archaea Energy Inc. landfill gas facility. UGI has also been active in developing RNG infrastructure through a partnership with Pennant Midstream LLC.