SusGlobal Energy Signs Commercial Terms for Renewable Natural Gas Purchase and Sale Agreement
Ten Year Offtake Agreement Valued at Approximately US$138 Million
- SusGlobal will provide up to 674,184 GJs/year while meeting pipeline quality standards and have direct pipeline access to the largest integrated gas storage facility in North America.
- The forecasted commercial operation date for the RNG facilities is scheduled for the Company's Belleville RNG Facility in September 2025, and the Hamilton RNG Facility for September 2026.
- The initial transaction term from the date of initial commercial operation of the RNG facilities will be 10 years.
Toronto, Ontario--(Newsfile Corp. - October 3, 2023) - SusGlobal Energy Corp. (OTCQB: SNRG) ("SusGlobal" or the "Company"), an environmental, agricultural, industrial biotechnology, and renewables company is pleased to announce it has signed Commercial Terms for a ten (10) year Renewable Natural Gas ("RNG") Purchase and Sale Agreement (the "Agreement"). The Buyer will pay a purchase price of over US$20.00 (CA$27.00) per Metric Million British Thermal Unit ("MMbtu"), equivalent to approximately one Gigajoule ("GJ") of RNG at the delivery point, valuing the ten (10) year offtake agreement at approximately US$138,000,000 (CA$186,856,830).
The Agreement is an industry standard summary of the commercial terms for the Renewable Natural Gas purchase and sale which allows the parties to maintain confidentiality while finalizing the definitive Renewable Natural Gas Purchase and Sale Agreement ("RNGPA") in the form of a GasEDI Base Contract with special provisions and transaction confirmations in the coming weeks. The RNGPA incorporates mutually agreeable and additional, more comprehensive terms, representations, warranties, and covenants customary to meet the local natural gas operating system standards, purchase offtake arrangements and required reporting.
Under the terms of the agreement, SusGlobal has committed to produce up to 674,184 GJs annually of RNG to be generated through the anaerobic digestion of organic matter at the Company's licensed facilities in Belleville and Hamilton, Ontario.
"We are extremely pleased to be working with industry leaders," states Marc Hazout, CEO of SusGlobal. "This agreement represents a significant and lucrative offtake agreement and, both in terms of project and equity financing, a real win for all stakeholders. We have the infrastructure, assets, licenses, and capabilities to produce and distribute RNG which offers lower carbon options, adjacent to our existing fertilizer production facilities. We are proud to be building a revolutionary circular economy model for sustainable change, utilizing transformative technology solutions to regenerate organic waste to energy and fertilizers at our strategically located facilities in western and eastern Ontario near the largest integrated gas storage facility in North America. This long-term offtake agreement will ensure that SusGlobal will continue to lead the organic waste diversion and regenerative products program, helping to reduce the world's GHG emissions, meeting global fertilizer demand, creating strong alignment with our ESG and up-listing goals while maximizing shareholder value."
"This investment grade 10-year agreement with a seasoned and experienced Offtaker is coming at a time of rapid growth, to be funded by strategic equity financing, for SusGlobal," said Bruce Rintoul, Independent Director of SusGlobal. "SusGlobal is building a unique circular economy model as it provides sustainable transformative technology solutions and monetizes its existing environmental compliance approvals and infrastructure."
SusGlobal received a -24.7 score on its Carbon Intensity (CI) Report using the GHGenius model to calculate the CI of the produced RNG from Source Separated Organic (SSO) Feedstock, analyzing the energy balance and emissions of contaminants associated with the production and use of traditional and alternative transportation fuels. As this system uses a reversed scaled approach, in which a lower number denotes a better value in the RNG and sustainability, SusGlobal is expected to continue to receive these opportunities in the future attracting seasoned offtake partners.
Carbon intensity (CI) scores are the backbone behind Low Carbon Fuel Standards ("LCFS") and are measured in grams of carbon dioxide equivalent per megajoule of energy (gCO2e/MJ). Fuels with CI scores above the benchmark create deficits which can be satisfied by purchasing LCFS credits generated by fuels with CI scores below the benchmark. The more the CI is below the benchmark, the more valuable the corresponding credit, everything else being equal. RNG, as those generated by SusGlobal, which carry a negative CI score are generally considered more favorable.
Versions of the LCFS model are specified in renewable fuel regulations in the provinces of Ontario, Alberta and British Columbia. The GHGenius is capable of estimating life cycle emissions of the primary greenhouse gases (GHG) and the criteria pollutants from combustion and process sources. GHGenius can predict emissions for past, present and future years through to 2050 using historical data or correlations for changes in energy and process parameters with time that are stored in the model.
About SusGlobal Energy
SusGlobal Energy Corp., the developer of SUSGRO®, an award winning and revolutionary pathogen free organic liquid fertilizer, is an environmental, agricultural and industrial biotechnology company focused on acquiring, developing, and monetizing a portfolio of proprietary technologies in the waste to energy and regenerative product applications globally. It is management's objective to grow SusGlobal into a significant sustainable waste to energy and regenerative products provider and a trusted brand for the fertilizer, soil and aquaculture market, as LEADERS IN THE CIRCULAR ECONOMY®.
For more information, please visit the Company's website at: www.susglobalenergy.com
Safe Harbor Statement
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's objectives. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "aims," "potential," "goal," "objective," "prospective," and similar expressions, or that events or conditions "will," "would," "may," "can," "could" or "should" occur. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward-looking statements as a result of various factors, including, but not limited to, lack of sufficient financial resources; variations in market conditions, currency and our stock; the Company's ability to obtain any necessary permits, approvals, consents or authorizations required for its activities; the Company's ability to produce energy, biogas, renewable natural gas, compost or organic fertilizer from its properties successfully or profitably, to continue its projected growth, or to be fully able to implement its business strategies and other risk factors described in the Company's filings with the U.S. Securities and Exchange Commission, which may be viewed at www.sec.gov.
SusGlobal Energy Corp.
Marc Hazout, President and CEO
Tel: 1 (866) 512-7374
SOURCE: SusGlobal Energy Corp.
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