BurTech Acquisition Corp. (NASDAQ:BRKHU) announced that it has entered into a letter of intent (LOI) to potentially combine with sustainable natural gas producer CleanBay Renewables.

The deal would value CleanBay at $330 million and the parties expect to reach terms on a definitive agreement in the second quarter of 2023. So far, BurTech plans to fund the deal entirely from its $294 million in trust.

But first, it will have to secure an extension. The SPAC has a special meeting scheduled for March 10 where shareholders will vote on whether to extend its transaction deadline from March 15 to December 15.

BurTech will remain in SPACInsider‘s “Searching” column until this deal becomes definitive as there is no guarantee that the LOI will result in an execute merger agreement.

In fact, this is not the first time BurTech has publicized getting to this stage with a target. In June 2022, it acknowledged reports it had signed a non-binding LOI with Indian digital entertainment company JetSynthesys at a $700 million valuation. At the time, BurTech was seeking up to $120 million in additional outside financing to support the deal, but it has made no mention of such talks since.

Annapolis, Maryland-based CleanBay would represent a target that is closer at hand with a business in producing sustainable natural gas that has traded well for other de-SPACs. For now, CleanBay’s operations focus on making fertilizer out of agricultural waste products like chicken litter.

But, this same process could capture natural gas products and hydrogen at an industrial scale. CleanBay believes its bioconversion facility could at full capacity recycle 150,000 tons of poultry litter annually into 750,000 MMBtu of sustainable natural gas and 100,000 tons of new recycled fertilizer.

This process would gain carbon credits equivalent to about 1,000,000 tons of CO2. CleanBay could also opt to orient its facilities towards hydrogen rather than natural gas, and could generate an estimated 20,000 tons per facility annually.

It is not yet clear how much capital CleanBay would need to pump into existing infrastructure to meet this potential. But, one project based in Maryland would be eligible for up to $250 million in municipal bonds. It has another project in the pipeline in Delaware and a third in California at an earlier stage of development that has been approved for $540 million in revenue bonds.