UGI Corporation has committed to investing approximately $150m to develop two new dairy cluster renewable natural gas (RNG) projects in South Dakota, US.

The two clusters of dairy manure waste to RNG projects, which include Brookings and Lakeside, are planned to be completed in 2024.

The company has selected MBL Bioenergy for the development of its second and third clusters of dairy manure waste to RNG projects.

UGI’s subsidiary UGI Energy Services (UGIES) will provide 100% of the funds for the projects.

Launched to develop RNG projects in South Dakota, MBL Bioenergy is a joint venture between Sevana Bioenergy, UGIES, and a subsidiary of California Bioenergy (CalBio).

Planned to be built at three farms located near Estelline, the Brookings cluster is expected to generate nearly 300 million cubic feet of RNG annually. It is planned to be completed in 2024.

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By GlobalData

To be built at two farms located near Summit, the Lakeside cluster is anticipated to have a production capacity of approximately 225 million cubic feet of RNG annually.

Waste from the dairy farms will be collected and anaerobically digested to produce biogas. The resulting gas will be supplied to a gas upgrading facility and, subsequently, into the local natural gas distribution system.

UGI’s first RNG investment in South Dakota, the $70mn Moody Cluster, is currently under construction. It is planned to be commissioned by late 2023.

UGI chief operations officer Robert Beard said: “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.

“The Moody cluster is now well into construction and anticipated to be online in late 2023. 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.”

CalBio CEO Ross Buckenham said: “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.”