LNG giant Shell said it would buy 100 percent shareholding of Denmark-based biogas producer Nature Energy Biogas for nearly $2 billion.
Shell Petroleum NV, a unit of Shell, has reached an agreement with Davidson Kempner Capital Management, Pioneer Point Partners, and Sampension to buy the firm.
Nature Energy owns and operates 14 industrial scale biomethane plants and an international development pipeline of about 30 plants across Europe and North America. The company’s current production reaches around 6.5 million MMBtu/year (3,000 boe/day).
Shell said in a statement the acquisition would be absorbed within the company’s current capital range, which remains unchanged.
By purchasing Nature Energy, Shell said it would acquire the largest renewable natural gas (RNG) producer in Europe, its portfolio of cash generative operating plants, associated feedstock supply and infrastructure, its pipeline of growth projects, as well as its in-house expertise in RNG plant technology.
This acquisition would further increase Shell’s ability to work with its established customer base across multiple sectors to accelerate its transition to net-zero emissions, it said.
Also, it would support Shell’s ambition to profitably grow its low carbon fuels production and customer offering in its marketing business.
Shell has an existing RNG production business in North America, with one operational site and four under construction.
The firm is a trader of RNG and has a wide range of RNG and bio-LNG customers, including large corporate, road hauliers, and marine customers.
Nature Energy and its 420 employees located in Europe and North America would operate as a wholly owned subsidiary of Shell, initially under its existing brand.
The transaction remains subject to regulatory approvals and Shell expects it to close in the first quarter of 2023.