Xebec signs LOI for Alberta RNG project, launches investment fund

By Erin Voegele | June 03, 2020

Xebec Adsorption Inc. has signed a letter of intent (LOI) for a commercial renewable natural gas (RNG) project in Alberta and has partnered with Fonds de solidarité FTQ to launch an investment fund to increase RNG production in Quebec.

Xebec announced on June 3 that it signed a LOI on May 28 for the sale of a multi-million dollar biogas-to-RNG installation to a large-scale utility customer in Alberta. Few details were released, but Xebec said it expects to deliver the system in 2021. The company also noted the project represents the first commercial RNG project in Alberta.

Earlier in the week, on June 1, Xebec and Fonds announced the creation of the GNR Quebec Capital L.P. investment fund. With an initial capitalization of $20 million, the fund aims to increase RNG production in Quebec. Xebec said partners, particularly from the agricultural and municipal sectors, will have access to the capital and expertise needed to develop and operate efficient facilities to treat organic waste.

Xebec and Fonds will each initially invest $10 million into the partnership. The two companies expect the partnership to eventually receive an aggregate $100 million from Xebec, Fonds and other investors, and said the initiative could fund 12 to 15 RNG projects over the next decade. The general partner, GNR Quebec Capital Management Inc., overseen by a board of directors nominated by Xebec and Fonds will be managing the partnership.

Xebec discussed its work in the biogas sector during a first quarter earnings call held May 27. During the call, Prabhu Rao, chief operating officer of the company, said the company is scheduled to commission several biogas plans during the second and third quarters of this year, including two in Ontario and two in Italy. Over the same time period, he also said Xebec will ship multiple PSA units for biogas projects in Austria and France, ship Biostream biogas products to dairy farms in California, and ship hydrogen purification solutions to customers in China and Europe.

Xebec reported revenues of $12.2 million for the first quarter of 2020, up from $9.8 million reported for the same period of last year. EBITDA was at $800,000, compared to $1.1 million during the first quarter of 2019. Net loss was $700,000, or 1 cent per share, for the first quarter of this year, compared to a net profit of $400,000, or 1 cent per share, for the same period of last year.