Energy major Shell is buying Europe’s largest renewable natural gas (RNG) — or biomethane — producer Nature Energy Biogas for nearly $2bn.
Dutch refining subsidiary Shell Petroleum said it has reached an agreement with Davidson Kempner Capital Management, Pioneer Point Partners and Sampension to acquire all the shares in Denmark-based Nature Energy.
The acquisition includes Nature Energy’s portfolio of cash-generative operating plants, associated feedstock supply and infrastructure, plus its pipeline of growth projects, Shell said.
Liquid biomethane is seen as a competitive option to help decarbonise hard-to-abate sectors including shipping.
The acquisition will further increase Shell’s ability to work across multiple sectors to accelerate its transition to net-zero emissions, the group added, and support Shell’s ambition to profitably grow its low carbon fuels production,” the group said.
The firm also has in-house expertise in the design, construction, and operation of plant technology for the production of RNG from agricultural, industrial, and household wastes.
Shell downstream director Huibert Vigeveno said Nature Energy will add a European production platform and growth pipeline to Shell’s existing RNG projects in the US.
“We will use this acquisition to build an integrated RNG value chain at global scale, at a time when energy transition policies and customer preferences are signalling strong growth in demand in the years ahead.”
Shell has a target to be a net-zero emissions energy business by 2050.
Nature Energy was founded in 1979 as a natural gas distributor and established its first biogas plant in Denmark in 2015. It now has 14 operating plants with associated infrastructure, feedstock arrangements, and current 2022 production of around 6.5m MMBtu per year.
The company also has a pipeline of around 30 new plant projects in Europe and North America. More than a third of these projects are in the medium-to-late development stage and could deliver up to 9.2m MMBtu per year by 2030, Shell added.
The transaction is expected to close in the first quarter of 2023, subject to regulatory approvals, and Shell said the cash-generative firm is expected to be accretive to Shell’s earnings from completion and deliver double-digit returns
