Dover, Delaware — Chesapeake Utilities Corporation (CPK), a NYSE-listed diversified energy delivery company, announced today that the Company is progressing on multiple opportunities that will advance its Renewable Natural Gas (RNG) strategy. The first such opportunity represents a partnership between Chesapeake Utilities and Bioenergy DevCo (BDC), a leading global developer of anaerobic digestion facilities that create renewable energy and healthy soil products from organic material. The joint project involves removing excess organics from poultry waste and converting it into RNG.
The intent is for BDC and Chesapeake Utilities Corporation affiliates Eastern Shore Natural Gas, Chesapeake Utilities and Marlin Gas Services, to collaborate on this project in addition to several other project sites where organic waste can be converted into a carbon-negative energy source. Beyond the environmental and energy benefits, this project will also support the economy in the Delmarva region.
The resources generated from organic waste at BDC’s anaerobic digestion facilities in Delaware will become utility-quality RNG once it is processed by a $6 million gas processing plant Chesapeake Utilities Corporation will build. Eastern Shore Natural Gas Company (ESNG) and Marlin Gas Services will also make incremental investments associated with the transport and receipt of RNG for multiple suppliers, totaling approximately $7 million. These investments include an interconnect facility and additional transport equipment. The RNG will ultimately be delivered through Chesapeake Utilities’ distribution system to its natural gas customers.
“We are committed to operating in a manner that leads to a more sustainable environment and future, thereby ensuring a better quality of life in our communities. We have taken steps to ensure our Company can support the emergence of the renewable fuels market and do its part to assist in managing agricultural and other waste recovery. These investments and our recent tariff changes to establish gas quality standards are evidence of our efforts,” said Jeff Householder, President and Chief Executive Officer of Chesapeake Utilities Corporation. “Investments to support RNG flowing through our pipelines provide us the opportunity to significantly reduce our carbon footprint, diversify our natural gas portfolio and benefit our customers and communities.”
To accommodate requests to receive RNG into its pipeline, ESNG recently established gas quality specifications and standards that were equal to or greater than the gas tariffs of the three upstream pipeline systems that interconnect with ESNG. The proposed tariff revisions were accepted by the Federal Energy
Regulatory Commission (FERC). ESNG expects to undertake additional capital investments in terms of interconnection facilities for receipt of the natural gas. Chesapeake Utilities is actively pursuing RNG project opportunities with those interested in accessing the Company’s pipeline system.
Aside from the partnership with BDC, Chesapeake Utilities is also in negotiations on several different RNG opportunities. While each opportunity is unique, there are several common attributes. First and foremost is the environmental benefit that comes from relying on RNG, as it is derived from organic waste materials from farms, landfills and wastewater treatment plants. The biogas produced from the waste materials is processed and purified to create RNG that is fully interchangeable with conventional natural gas. RNG provides a clean energy delivery alternative.
Second, these projects typically involve several of the Company’s business units which play key role