This study presents a demand modeling for landfill gas, which is used as alternative energy source for district cooling business. By analyzing the cost minimizing behavior of producer facing with three alternative energy sources such as electricity, cooling heat water, and gas, a demand function for landfill gas is derived fro, the optimal operating time of gas fired production facility, and estimated using unpublished data, which are associated with Seoul city`s development plan for Sang-am area. The estimation results repeals that Seoul City could supply the land-fill gas of 13.76 million cubic meters each year at the price of about 16 won per cubic meters. However, if the investment costs associated with installation of gas collecting facilities are treated as sunk costs, annual amount of gas supplied is expected to increase to 14.22 million cubic meters at a lower unit price of 14.76 won.