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SHV Energy, UGI to accelerate push for renewable DME

May 19, 2021 By    

SHV Energy and UGI International, a subsidiary of UGI Corp., will launch a joint venture to advance the production and use of renewable dimethyl ether (rDME), a low-carbon sustainable liquid gas, and accelerate renewable solutions for the LP gas industry.

SHV and UGI anticipate the development of up to six production plants within the next five years, targeting a total production capacity of 300 kilotons of rDME per year by 2027. The aggregate investment is estimated at about $1 billion, which is expected to involve third-party investment.

The joint venture will invest initially in the U.K. beginning in early 2022 and thereafter in the U.S., a company representative says.

San Diego-based Oberon Fuels is one U.S. producer of rDME. Oberon and SHV Energy announced a partnership in 2020 to accelerate the use of rDME to reduce the carbon footprint of transportation fuel, including propane autogas.

“The announcement from SHV and UGI provides additional validation of the global potential for the DME molecule to reduce emissions across multiple sectors, including off-grid energy,” says Rebecca Boudreaux, president and CEO of Oberon Fuels. “While Oberon is not a part of this JV, we are proud to continue to collaborate with SHV on accelerating the use of renewable DME to reduce the carbon footprint of transportation fuel.”

The joint venture between SHV and UGI, in which both parties would have an equal stake, will bring scale and critical mass to the rDME market by developing opportunities for investment in production capacity, the companies say. Moreover, it will promote the use of rDME by driving efforts geared at broad market acceptance, developing new rDME-based technologies to gain traction among users and supporting the development of infrastructure, regulations and standards for the safe use of rDME in the off-grid energy sector. The joint venture aspires to make available about 20 percent of the rDME production to peers in the LPG industry, the companies add.

rDME is a liquid gas – chemically similar to propane and butane – that can be produced from multiple renewable feedstocks, including waste streams and residues. Being a safe, cost-effective and clean-burning fuel, rDME is a viable, sustainable addition to the energy mix, according to the companies. It has a low greenhouse gas footprint and is compatible with existing LPG infrastructure and equipment for off-grid energy uses, including heating, cooking and transport.

“Liquid gas is an important, clean and efficient energy source used in over 1,000 different applications by millions of people around the world,” says Bram Gräber, CEO of SHV Energy. “Finding accessible, sustainable and affordable feedstock to produce alternative liquid renewable gas is a high priority for the LPG industry. We are convinced that rDME ticks all the boxes to be a game-changer for our industry. We are excited to join forces with UGI to guide the LPG industry in this important transition. We are ready to take up the responsibility to bring rDME to fruition, which will be to the benefit of the whole industry and its customers.”

Roger Perreault, executive vice president global LPG of UGI Corp., who will become UGI’s CEO in June, adds: “The proposed joint venture leverages our expertise in off-grid energy and renewable fuels. Innovation is at the heart of both our organizations, and by teaming up we will combine our strong innovative capabilities. As leading distributors of LPG, we jointly provide an even more extensive global distribution network through which to promote the use of rDME.”

Both UGI and SHV Energy distribute propane in the U.S. through AmeriGas and Pinnacle Propane, respectively.

Featured image: knowlesgallery/iStock / Getty Images Plus/Getty Images

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About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at or 216-706-3748.

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