Enbridge Acquires Seven RNG Facilities For US$1.2 Billion

The Seven Facilities Currently Produce, In Aggregate, About 5 Billion Cubic Feet Of RNG Per Year

Among the seven operating RNG assets purchased by Enbridge from Morrow Renewables is the Turkey Creek energy plant in Alvarado, Texas. (Image Courtesy Of Morrow Renewables)

Enbridge has purchased seven renewable natural gas (RNG) facilities from RNG developer Morrow Renewables for US$1.2 billion. Enbridge said the carbon-neutral fuel will play a critical role in society’s cleaner energy future, and that the assets complement recent Enbridge moves to grow North America’s volumes of RNG made from food and farm waste.

“This transaction represents a uniquely de-risked portfolio of operating and scalable RNG assets,” says Enbridge President and Chief Executive Officer Greg Ebel. “The landfill gas-to-RNG facilities will accelerate progress toward our energy transition goals.” Enbridge is adding about 86 full-time employees in plant and field operations from Morrow Renewables to its staff.

The Morrow facilities deliver RNG from municipal landfills in six Texas locations — Edinburg, Hinton, Tyler, Melissa, Longview, and Alvarado — in addition to Fort Smith, Arkansas. All are regions with growing demographics, ongoing landfill growth, and strong partnerships with local municipalities.

Landfill RNG facilities collect gas produced by waste decomposition in the landfill and treat and compress the gas to pipeline specifications. After it’s upgraded into pipeline-grade methane, RNG is easily blended into existing natural gas distribution and transmission networks where it can be used to fuel transit fleets, power industry facilities, and heat homes and businesses. Without these facilities, the gas would be released or flared.

The seven facilities currently produce, in aggregate, about 5 Bscf (141.6 × 106 m3) of RNG per year. All seven are in operation, with a commercial structure underpinned by long-term contracts with municipalities and offtake agreements with customers, so the portfolio will contribute to earnings before interest, taxes, depreciation, and amortization in 2024.

“These assets were developed by a reputable management team that’s been in the business for more than 20 years; we look forward to working with that team toward a smooth transition,” says Caitlin Tessin, Enbridge’s vice president of strategy and market innovation.

Enbridge said that fundamentals for RNG are strong — with indications of continued demand growth over the long term as gas utilities increasingly continue to set RNG blending targets. The acquisition advances Enbridge’s commitment to energy transition leadership by advancing new low-carbon sources of energy — such as RNG.