CALGARY,
AB, Oct. 17, 2022 /CNW/ - Tidewater Renewables
Ltd. ("Tidewater Renewables" or the "Corporation") (TSX: LCFS) is
pleased to announce that its majority owned subsidiary Rimrock
Renewables Limited Partnership ("Rimrock") has entered into a
20-year offtake agreement (the "Offtake Agreement") with FortisBC
Energy Inc. ("FortisBC"). Under the Offtake Agreement, FortisBC
expects to purchase up to 525,000 gigajoules ("GJ") of renewable
natural gas ("RNG") annually from a new RNG facility located in
Foothills County near High River,
Alberta (the "RNG Facility").
"On behalf of the entire team at Tidewater Renewables, I want to
congratulate our partners at FortisBC for their leadership in
climate action and look forward to working together to build a
lower carbon future," said Joel
MacLeod, Executive Chairman and CEO. "The 20-year Offtake
Agreement by FortisBC marks a significant milestone for the RNG
Facility and enhances the economic certainty of the project."
"One of the many ways we're working to reduce greenhouse gas
emissions is by increasing the amount of renewable and low carbon
gases, like RNG, in our system," said David
Bennett, director of renewable gas and low carbon fuels at
FortisBC. "And it is with agreements like these, with dedicated RNG
suppliers such as Tidewater Renewables, that we can make
commitments to reducing greenhouse gas emissions in our system and
for our customers."
RNG Offtake Agreement with
FortisBC
Under the Offtake Agreement, FortisBC expects to purchase up to
525,000 GJs of RNG annually from the RNG Facility, underpinning
100% of the project's revenue generation. Upon completion, the RNG
Facility will convert organic waste into enough energy to meet the
needs of more than 5,800 residential homes in British Columbia.
- Counterparty: FortisBC (Investment Grade Credit
Rating)
- Term: 20 years
- Volume: Up to 525,000 GJ per annum
The Offtake Agreement remains subject to regulatory approval by
the British Columbia Utilities Commission, with a decision expected
to be received in the first quarter of 2023. Tidewater Renewables
expects to start supplying FortisBC with RNG by the first half of
2024.
RNG Facility
On April 4, 2022, Tidewater
Renewables closed a strategic renewable natural gas and feedstock
partnership with Rimrock RNG Inc. and Rimrock Cattle Company. On
the back of this announcement, Tidewater Renewables, through its
subsidiary Rimrock, has commenced construction of the RNG Facility.
The RNG Facility will convert feedlot manure to pipeline
quality RNG with negative carbon intensity scores (meaning it takes
more carbon out of the environment than it produces) through an
anaerobic digestion and gasification process. Through its feedstock
partnership, Tidewater Renewables expects to secure 100% of the
project's feedstock requirements for the entirety of the life of
the project by the start of commercial operations of the RNG
Facility. Once operational, the RNG Facility is expected to
generate $10 million in Run Rate
EBITDA(1) (on a 100% basis) underpinned by the Offtake
Agreement.
(1)
|
Run Rate EBITDA used
throughout this press release is a non-GAAP financial measure. See
the "Non-GAAP Measures" in this press release and the Corporation's
MD&A for information on non-GAAP financial measures.
|
Renewable Natural Gas
Renewable Natural Gas ("RNG") is produced in a different manner
than conventional natural gas. It is derived from biogas, which is
produced from decomposing organic waste from landfills and
agricultural waste. The biogas is captured and cleaned to create
carbon neutral Renewable Natural Gas (also called biomethane). By
increasing the concentration of methane to a similar level as
natural gas, it becomes possible to distribute the gas to customers
via the existing gas grid and use in existing appliances.
Forward-Looking
Information
This news release contains forward-looking statements and
forward-looking information (collectively, "forward-looking
statements") that relate to the Corporation's current expectations
and views of future events. These forward-looking statements
relate to future events or the Corporation's future
performance. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives,
assumption or future events or performance (often, but not always,
through the use of words or phrases such as "will likely result",
"are expected to", "expects", "will continue", "is anticipated",
"anticipates", "believes", "estimated", "intends", "plans",
"forecast", "projection", "strategy", "objective" and "outlook")
are not historical facts and may be forward looking statements and
may involve estimates, assumptions and uncertainties which could
cause actual results or outcomes to differ materially from those
expressed in such forward-looking statements. No assurance can be
given that these expectations will prove to be correct and such
forward-looking statements included in this new release should not
be unduly relied upon. These statements speak only as of the
date of this new release. In particular and without
limitation, this news release contains forward-looking statements
pertaining to Tidewater Renewables' business as described under the
heading "About Tidewater Renewables" below; the estimated addition
of Run Rate EBITDA derived from the RNG Facility; the expectation
that the British Columbia Utilities Commission will approve the
Offtake Agreement during the first quarter of 2023; and the
expectation that RNG supply to FortisBC will commence during the
first half of 2024. Forward-looking information is based on a
number of assumptions and is subject to a number of risks and
uncertainties, many of which are beyond the Corporation's control,
which could cause actual results and events to differ materially
from those that are disclosed in or implied by such forward-looking
information. Such risks and uncertainties include, but are
not limited to, the factors discussed under "Risk Factors" in the
Corporation's supplemented PREP prospectus dated August 12, 2021, filed on SEDAR. Tidewater
Renewables does not undertake any obligation to update such
forward-looking information, whether as a result of new
information, future events or otherwise, except as expressly
required by applicable laws.
Non-GAAP Measures
Throughout this press release and in other materials disclosed
by the Corporation, Tidewater Renewables uses a number of financial
measures when assessing its results and measuring overall
performance. The intent of non-GAAP measures and ratios is to
provide additional useful information to investors and analysts.
Certain of these financial measures do not have a standardized
meaning prescribed by GAAP and are therefore unlikely to be
comparable to similar measures presented by other entities. As
such, these measures should not be considered in isolation or used
as a substitute for measures of performance prepared in accordance
with GAAP.
Run Rate EBITDA
"Run Rate EBITDA" is defined as the expected Adjusted EBITDA to
be generated by a specific asset or specific growth project
corresponding to a full year of operations at full capacity.
"Adjusted EBITDA" is calculated as income (or loss) before finance
costs, taxes, depreciation, share-based compensation, unrealized
gains/losses on derivative contracts, non-cash items, transaction
costs, lease payments under IFRS 16 Leases and other items
considered non-recurring in nature plus the Corporation's
proportionate share of EBITDA in its equity investment. The
calculation of Run Rate EBITDA is based in certain estimates and
assumptions and should not be regarded as a representation by the
Corporation or any other person that the Corporation will achieve
such operating results. Prospective investors should not place
undue reliance on the Corporation's Run Rate EBITDA and should make
their own independent assessment of the Corporation's future
results or operations, cash flows and financial condition.
Run Rate EBITDA guidance related to the RNG Facility contains
various assumptions related to throughput, sales prices, feedstock
pricing and operating expenses. Throughput and operating expense
assumptions are derived from the facility design. Sales and
feedstock pricing is derived from existing and prospective
agreements.
ABOUT TIDEWATER
RENEWABLES
Tidewater Renewables is traded on the TSX under the symbol
"LCFS". Tidewater Renewables is a multi-faceted, energy transition
company. The Corporation is focused on the production of low carbon
fuels, including renewable diesel, sustainable aviation fuel,
renewable hydrogen and renewable natural gas, as well as carbon
capture through future initiatives. The Corporation was created in
response to the growing demand for renewable fuels in North America and to capitalize on its
potential to efficiently turn a wide variety of renewable
feedstocks (such as tallow, used cooking oil, distillers corn oil,
soybean oil, canola oil and other biomasses) into low carbon
fuels. Tidewater Renewables' objective is to become one of
the leading Canadian renewable fuel producers. The Corporation is
pursuing this objective through the ownership, development, and
operation of clean fuels projects and related infrastructure,
utilizing existing proven technologies. Organically,
Tidewater Renewables will seek to leverage the existing
infrastructure and engineering expertise of Tidewater Midstream and
Infrastructure Ltd. regarding the development of the Corporation's
portfolio of greenfield and brownfield capital projects as well as
the expansion of the Corporation's product offerings.
Additional information relating to Tidewater Renewables is
available on SEDAR at www.sedar.com and at
www.tidewater-renewables.com.
SOURCE Tidewater Renewables Ltd.