As an environment-friendly and renewable energy source, biomethane plays a significant role in the supply of sustainable energy. To facilitate the decision-making process of where to build a biomethane production system (BMPS) and how to allocate the resources for the BMPS, this paper develops an analytical method to find the solutions to location and allocation problems by minimizing the supply chain cost of the BMPS. The BMPS consists of the local farms for providing feedstock, the hubs for collecting and storing feedstock from farms, and the reactors for producing biomethane from feedstock. A mixed integer nonlinear programming (MINLP) is introduced to model the supply chain by considering building, transportation, and labor costs. An alternative heuristic is proposed to obtain an optimal/sub-optimal solution from the MINLP. The validity of the proposed heuristic is proven by numerical examples that are abstracted from practical scenarios. (C) 2015 Elsevier Ltd. All rights reserved.