GFL Environmental Inc. announced that its wholly owned subsidiary, GFL Renewables LLC has entered into a joint venture with affiliates of OPAL Fuels LLC for the development, construction and operation of renewable natural gas (RNG) facilities at 2 GFL municipal solid waste (MSW) landfills; the Arbor Hills Landfill in Michigan and the Sampson County Landfill in North Carolina. GFL Renewables and OPAL Fuels will be 50/50 participants in the joint venture created for these projects. OPAL Fuels will oversee construction and develop and operate the facilities for the joint venture. Both projects will convert methane gas from collection systems at the MSW landfills into commercial- grade, pipeline-quality RNG that can be used in commercial and industrial direct-use applications including as fuel for natural gas-powered vehicles.
The Arbor Hills Landfill RNG project is expected to produce approximately 2 million MMBtu of pipeline-quality RNG each year. Construction of the facility is expected to commence in the first quarter of 2022 and commencement of operations is currently projected for the end of the first quarter of 2023. The Sampson County Landfill RNG project is expected to produce approximately 1 million MMBtu of pipeline-quality RNG each year. Construction of the facility is expected to commence by the second quarter of 2022 and commencement of operations is currently projected for the end of the second quarter of 2023.
GFL’s capital investment in the joint ventures with OPAL Fuels will total approximately US$70 million (CAD$90 million) over the next 18 months and generate over 3 million MMBtu per year of RNG. While current market rates for RNG range from mid to high US$30 per MMBtu, in its base case, which assumes rates at mid US$20s per MMBtu, GFL expects to realize annual free cash flow from these projects of US$40-45 million (CAD$51-58 million).
Patrick Dovigi, Founder and CEO of GFL said: “We are continuing to work on arrangements with leading developers and distributors at other GFL landfills and in the coming weeks, expect to announce arrangements for RNG facilities at 4 additional GFL landfill sites that are expected to generate approximately 2 million MMBtu of pipeline-quality RNG. The 6 projects in our base case are expected to generate over US$65 million (CAD$83 million) in incremental annual free cash flow and put us well on our way to realizing the previously stated opportunities within our GFL Renewables initiatives.”
Dovigi continued: “These facilities will also significantly advance our own sustainability goals and those of our customers, by reducing greenhouse gas emissions through the beneficial reuse of RNG to replace virgin fuel applications. These collaborations with industry leaders like OPAL Fuels are central to achieving GFL’s ambitions for a low carbon future.”