Alternative energy firm Intrepid Technology and Resources has signed a fixed price contract to supply renewable methane gas to its first strategic industrial customer, based near Intrepid's Whitesides plant.
The undisclosed industrial user will purchase Intrepid Technology and Resources’s (ITR) biomethane to replace propane for its 2008 production campaign which is expected to be underway by the end of March 2008.
This contract provides a discount to the user over the cost of propane, which is at $25 per million British Thermal Units (BTU), resulting in savings to the industrial customer but at the same time providing a substantially better price to ITR than can be obtained through sales to traditional natural gas customers.
By way of comparison, ITR’s current pipeline contract ties the price of gas to the Rocky Mountain Natural Gas Index, which is at about $8 per million BTUs, or roughly one-third the price of propane on an energy equivalent basis.
Jake Dustin, ITR’s president, said: Our ability to market our product in this way is a direct benefit obtained through the extensive Gas Technology Institute testing we recently completed.