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UGI's Unit and SHV Energy Plan a JV Deal to Promote rDME
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UGI Corporation’s (UGI - Free Report) subsidiary UGI International along with SHV Energy announced plans to launch a joint venture (JV) for promoting the usage and production of Renewable Dimethyl Ether (rDME). Both parties will have an equal stake in the JV.
The JV is expected to develop up to 6 production plants within the next five years, which will require an estimated investment of up to $1 billion. The funding will involve a third party. The total production capacity will be 300 kilotons by 2027 on an annual basis.
Motive Behind the Deal
The aim of the agreement is to boost the scale of the rDME market by creating investment opportunities for an expanded production capacity and promoting its use. Also, both companies will make efforts to develop new rDME-based technologies and support the process of building infrastructure, framing regulations and setting standards for the proper usage of rDME in the off-grid energy sector. The collaborative endeavor will leverage UGI Corp.’s expertise in off-grid energy and renewable fuels.
It plans to provide 20% of the rDME production to the Liquefied Petroleum Gas (LPG) industry for its de-fossilization. This will play a vital role as the industry is looking for a sustainable and affordable feedstock to produce an alternative liquid renewable gas.
Reasons for rDME’s Rising Popularity
rDME is a low-carbon sustainable liquid gas, which is safe and cost-effective and can be utilized to increase renewable solutions for the LPG industry. It reduces greenhouse gas (GHG) emissions by up to 85% from fossil fuel alternatives. Being highly compatible with the existing infrastructure and equipment, only limited incremental investments will be needed to make the LPG industry more sustainable.
Other Environmentally-Friendly Efforts
UGI Corp.’s buyout of GHI Energy, LLC is helping it expand its renewable product offerings and backing its eco-friendly goals. In November, its unit UGI Energy Services, LLC, expanded its renewable natural gas portfolio by making investment in New Energy One HoldCo LLC. Along with acquisitions, the company disposed its 5.97% ownership interest in the Conemaugh coal-fired generating station in fiscal 2020 to cut the total Scope I direct emissions by more than 30%.
Apart from UGI Corp., other utilities are taking initiatives to make its operations more sustainable. While MDU Resources (MDU - Free Report) plans to retire Hesket I & II coal-fired stations in early 2022, Atmos Energy (ATO - Free Report) aims at lowering methane emissions by 50% within 2035. Also, in March, National Fuel Gas Company (NFG - Free Report) had announced plans to lower GHG emissions by 75% within 2030 and 90% by 2050 from the 1990 base figure for its utility segment National Fuel Gas Distribution Corporation.
Shares of the company have gained 21.6% in the past six months, outperforming the industry’s rise of 21.3%.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
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UGI's Unit and SHV Energy Plan a JV Deal to Promote rDME
UGI Corporation’s (UGI - Free Report) subsidiary UGI International along with SHV Energy announced plans to launch a joint venture (JV) for promoting the usage and production of Renewable Dimethyl Ether (rDME). Both parties will have an equal stake in the JV.
The JV is expected to develop up to 6 production plants within the next five years, which will require an estimated investment of up to $1 billion. The funding will involve a third party. The total production capacity will be 300 kilotons by 2027 on an annual basis.
Motive Behind the Deal
The aim of the agreement is to boost the scale of the rDME market by creating investment opportunities for an expanded production capacity and promoting its use. Also, both companies will make efforts to develop new rDME-based technologies and support the process of building infrastructure, framing regulations and setting standards for the proper usage of rDME in the off-grid energy sector. The collaborative endeavor will leverage UGI Corp.’s expertise in off-grid energy and renewable fuels.
It plans to provide 20% of the rDME production to the Liquefied Petroleum Gas (LPG) industry for its de-fossilization. This will play a vital role as the industry is looking for a sustainable and affordable feedstock to produce an alternative liquid renewable gas.
Reasons for rDME’s Rising Popularity
rDME is a low-carbon sustainable liquid gas, which is safe and cost-effective and can be utilized to increase renewable solutions for the LPG industry. It reduces greenhouse gas (GHG) emissions by up to 85% from fossil fuel alternatives. Being highly compatible with the existing infrastructure and equipment, only limited incremental investments will be needed to make the LPG industry more sustainable.
Other Environmentally-Friendly Efforts
UGI Corp.’s buyout of GHI Energy, LLC is helping it expand its renewable product offerings and backing its eco-friendly goals. In November, its unit UGI Energy Services, LLC, expanded its renewable natural gas portfolio by making investment in New Energy One HoldCo LLC. Along with acquisitions, the company disposed its 5.97% ownership interest in the Conemaugh coal-fired generating station in fiscal 2020 to cut the total Scope I direct emissions by more than 30%.
Apart from UGI Corp., other utilities are taking initiatives to make its operations more sustainable. While MDU Resources (MDU - Free Report) plans to retire Hesket I & II coal-fired stations in early 2022, Atmos Energy (ATO - Free Report) aims at lowering methane emissions by 50% within 2035. Also, in March, National Fuel Gas Company (NFG - Free Report) had announced plans to lower GHG emissions by 75% within 2030 and 90% by 2050 from the 1990 base figure for its utility segment National Fuel Gas Distribution Corporation.
Zacks Rank & Price Performance
Currently, the utility carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of the company have gained 21.6% in the past six months, outperforming the industry’s rise of 21.3%.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>