Suburban Propane Partners, L.P., Oberon Fuels and Empresas Lipigas Announce Collaboration to Evaluate Renewable Dimethyl Ether + Propane Blends in Latin America

(Oberon Fuels) Three leaders in their respective industries announce a collaboration to test a clean, innovative low carbon fuel blend in residential and commercial applications in Latin America.

The collaboration includes Suburban Propane Partners, L.P. (NYSE: SPH) – the third largest retail propane distributor in the United States; Empresas Lipigas – a leading distributor of liquified petroleum gas (LPG, or propane) in Chile, Colombia and Peru; and Oberon Fuels – currently the only commercial producer of renewable Dimethyl Ether (rDME) globally. The parties aim to evaluate and validate the material compatibility, safety and performance attributes of a rDME+LPG blended product for use in residential and commercial heating and cooking applications in Latin America.

Dimethyl ether has been used for decades as an environmentally safe, non-toxic aerosol propellant. Renewable DME has similar properties to LPG making it an excellent blending agent with LPG. The rDME+LPG blend can be stored and transported using existing LPG infrastructure and can be used in many applications including transportation, cooking, heating, forklifts, and power generation. When made by the Oberon process, the California Air Resources Board has calculated that dairy biogas-based rDME has an estimated carbon intensity (CI) value of -278. Even in low volumes, rDME can dramatically reduce the CI of LPG blends.

“At Lipigas we are preparing our way to become a carbon neutral company. That is why we are exploring more sustainable energy alternatives that contribute to Chile achieving energy independence. For this reason, we have sealed this alliance with Suburban and Oberon Fuels that will allow us to exchange knowledge and lay the foundations for the development in Chile and Latin America of rDME, a gas of renewable origin, carbon neutral, which is being used successfully in other parts of the world. The great advantage of rDME is that it is very similar to traditional liquefied petroleum gas, which allows mixing both gases using the same LPG cylinders and current infrastructure. In addition, rDME+LPG blends are compatible with the equipment that customers use today in their homes, businesses or industries, requiring little or no modifications,” said Ángel Mafucci, CEO of Empresas Lipigas S.A.

Lipigas will manage the testing plans and protocols including: rDME+LPG blend percentage, appliance specifications, testing timeframes, and applications in which the rDME+LPG blended product will be used. Suburban Propane, which early on saw the potential for rDME and is the first LPG company in the world to invest in rDME production, is facilitating project logistics and participating in data analysis. Oberon Fuels will provide the rDME, produced from its flagship production facility in Brawley, California, and domain expertise to the project based on more than a decade of production, market and regulatory development activities.

“The evaluation of Oberon’s rDME for residential and commercial markets in Latin America is a major milestone for us on two fronts,” said Rebecca Boudreaux, Ph.D., President and Chief Executive Officer of Oberon Fuels. “It marks the shift in our US-based market development efforts to global deployment, and it is the first step in the use of rDME+LPG blends beyond transportation. We are thrilled to be working with Lipigas and Suburban Propane on this project.”

“From the very beginning of our investment in Oberon Fuels, we believed in the potential for rDME+propane blended products to reduce the carbon intensity of propane beyond the transportation sector,” said Michael Stivala, President and Chief Executive Officer of Suburban Propane. “We are extremely pleased to collaborate with Lipigas and Oberon to begin to test these applications. Lipigas’ market leadership in Chile, combined with our experience and reach across the US markets, will accelerate the adoption of rDME across the full spectrum of LPG uses.”

According to IHS Markit, demand for LPG in Latin America “is driven by residential and commercial customers, which consume about 80 percent of the region’s LPG.” Blending rDME into LPG offers an intriguing and potentially significant opportunity to reduce both carbon and criteria emissions associated with LPG use. Because rDME can be produced from local waste streams via proven, dedicated pathways, it offers a low-cost, complimentary route to decarbonization with LPG and renewable LPG.

Suburban Propane Partners, L.P. is a publicly traded master limited partnership listed on the New York Stock Exchange under the ticker symbol SPH. Headquartered in Whippany, New Jersey, Suburban has been in the customer service business since 1928 and is a nationwide distributor of propane, renewable propane, fuel oil and related products and services, as well as a marketer of natural gas and electricity and an investor in low carbon fuel alternatives. The Partnership serves the energy needs of approximately 1 million residential, commercial, governmental, industrial and agricultural customers through approximately 700 locations across 41 states. The Partnership is supported by three core pillars: (1) Suburban Commitment – showcasing the Partnership’s 90+ year legacy, and ongoing commitment to the highest standards for dependability, flexibility, and reliability that underscores the Partnership’s commitment to excellence in customer service; (2) SuburbanCares – highlighting the Partnership’s continued dedication to giving back to local communities across the Partnership’s national footprint and (3) Go Green with Suburban Propane – promoting the clean burning and versatile nature of propane and renewable propane as a bridge to a green energy future and developing the next generation of renewable energy.

Empresas Lipigas S.A. is an energy company that contributes to the sustainable development by improving the quality of life through the commercialization of energy solutions in Latin America. In Chile, it is a leader in the LPG field through the largest network of nationwide coverage. It services residential, industrial, real estate sectors and vehicular gas from Arica to Punta Arenas. It is present in the LPG distribution market in Colombia since 2010 and in Peru since 2013. It is also present in the distribution of natural gas in Chile through the distribution of network natural gas and LNG and in Peru through the distribution of CNG and LNG. Since 2017 it generates and commercializes electric energy for industrial and commercial clients of the free segment in Chile. For more information visit: www.lipigas.com

Founded in 2010, California-based Oberon Fuels is on a global mission to decarbonize transportation by producing a powerful, enabling molecule, dimethyl ether (DME). DME, which can range from being ultra-low carbon to carbon-negative, can significantly reduce the carbon footprint of the transportation sector and beyond 1) as an energy-dense, cost-effective means to move renewable hydrogen, 2) as a blending agent for LPG, and 3) as a diesel replacement. Oberon is currently the only company in the world to be producing renewable DME for commercial markets. For the past 10 years, Oberon has challenged the status quo by introducing innovative solutions to the transportation sector to reduce its carbon footprint, vehicle emissions and improve local air quality while creating economic opportunity for the communities where they operate. In 2013, Oberon Fuels’ refinery in Brawley, Calif., produced the first fuel-grade DME in North America, and in 2021 produced the first-ever renewable DME in the US. Oberon’s DME has powered vehicle demonstrations around the world with Volvo Trucks, Mack Trucks, Ford, among others. Oberon Fuels is privately held with both private and strategic investors, including Suburban Propane.