Xebec Adsorption Inc., a global provider of gas purification solutions for the industrial, energy and renewables marketplace, announced that it signed an exclusive market development and commercialization agreement with Sapio Group. Under this agreement, Sapio is entering into a minimum purchase order commitment for multiple Xebec biogas upgrading plants for a total value of Euro 33 million (CDN$ 51 million) to be delivered over three years. (

Sapio Group is the largest industrial gas company in Italy with over 1,800 employees and revenues of Euro 500+ million. Its business model includes the production and distribution of bio-liquefied natural gas (bio-LNG) throughout Italy. After an extensive supplier evaluation process, Sapio chose Xebec as its biogas upgrading partner for bio-LNG facilities to be built by Sapio. The expectation of both parties is that 30 to 40 bio-LNG facilities will be built over the next 3 to 5 years. Xebec will provide the biogas upgrading units, including a CO2 reduction module, that will lower the CO2 content in the product gas down to 50 ppm (parts per million), allowing for on-site liquefaction of the renewable natural gas (RNG) and conversion into bioLNG.

Italy could soon emerge as the largest biogas upgrading market in the world

The Italian Government recently identified the transportation sector as a primary end user for renewable natural gas (RNG) in the form of bio-CNG and bio-LNG. On March 1, the European Commission under EU State aid rules approved an Italian support scheme for the production and distribution of advanced biofuels, including advanced biomethane, in the amount of Euro 4.7 billion (CDN$7.4 billion).

On March 2, 2018, the day after the EU cleared the program, Italy's Economic Development Ministry (MISE) signed two new energy decrees which include measures to aid large gas consumers as well as incentives for biomethane in transport for the Euro 4.7 billion (CDN$7.4 billion) previously approved.

By March 15, 2018, Italy’s Gas Operator, Snam, had received more than 500 requests from potential biomethane producers to connect their upcoming biomethane production sites to the existing gas grid, indicating a market size for biogas upgrading equipment in excess of CDN$ 1.5 billion over the next 3 to 5 years.

“We are very excited about our opportunities in Italy. According to the information available to us, we believe that Italy will emerge as the largest biogas upgrading market in the world over the next 3 to 5 years,” said Kurt Sorschak, president of Xebec. “We have an outstanding partner in Sapio who will work diligently on broadening their own bio-LNG projects and, along with our collaboration to commercialize Xebec’s biogas upgrading systems to third parties, we expect to gain significant market share overall. This strategic alliance with Sapio could allow us to become one of the market leaders for biogas upgrading in Italy.”