Biomethane is considered better for the environment than fossil fuels because it made from organic waste materials.
The project will take place in Saint-Hyacinthe about 60 kilometres northeast of Montreal. The gas will be injected into Gaz Métro's network from there.
Gaz Métro is a natural gas distributor that serves about 300 municipalities in Quebec and Vermont.
According to a press release, this could lead to an annual reduction of 25,000 tonnes of greenhouse gas.
Gaz Métro will purchase the energy from Saint-Hyacinthe and will put the infrastructure in place to make the biomethane readily accessible to citizens.
This project is subject to approval by Quebec's energy board, the Régie de l'énergie.