Greenlane Renewables Inc shares climbed 19% to $0.37 on Monday after the global provider of biogas upgrading systems announced that it has inked a collaborative deal with Brazil’s ZEG Biogás e Energia SA, a company 50% owned by Petrobras (NYSE:PBR)’ former fuel distribution unit Vibra Energia SA, to locally produce and sell Greenlane's most popular biogas upgrading products.
Greenlane said it expects the partnership will help speed up growth of biomethane, or renewable natural gas (RNG), output in the world's largest sugarcane-growing region.
“With VIBRA's 50% ownership of ZEG Biogás and its significant commitment of capital, the result is the most important deal we have done to date at Greenlane,” Greenlane Renewables Brad Douville said in a statement.
“We believe it opens up an excellent opportunity to accelerate the production of biomethane in Brazil, at an industrial scale, and to solidify Greenlane's market-leading position, together with a very capable and ambitious local partner,” he added.
Douville noted the partnership is expected to provide revenue for Greenlane under what it called a new royalty-like business model, combined with ongoing service contracts.
Greenlane added that it and ZEG Biogás will collaborate to establish volume production of Greenlane's Totara+ water wash biogas upgrading product, which is capable of processing up to 2,500 normal meters cubed per hour (Nm3/h) of inlet biogas.
ZEG Biogás has a goal of producing 75 Totara+ systems in the next five years, with production capacity being phased in over time along with a minimum volume commitment in the first two years, according to the company.
Furthermore, Greenlane stated that it has supplied the biogas upgrading system for the first commercial-scale pipeline injection biomethane project in the Brazilian sugarcane industry and is the market-leading provider of biogas upgrading systems in the country.
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