Sweden-based bio-LNG producer Scandinavian Biogas will establish a unit in Germany and plans to invest up to 90 million euros ($100 million) in two German biogas projects.
The firm said in a statement on April 14 that it has signed an agreement with German Biogas i Sverige, a project development company which has initiated the development of two production plants in Germany with a combined capacity of approximately 240 GWh.
Each production plant company will be co-owned by Scandinavian Biogas (85 percent) and German Biogas i Sverige (15 percent).
According to Scandinavian Biogas, closing will take place once each company is registered, and all other conditional agreements are met.
The firm expects this to take place no later than May 31, 2023.
FID in 2024
Initially, Scandinavian Biogas will focus on these two projects, and the company estimates that the final investment decisions will be made in 2024 when, among other things, environmental permits are granted.
The total investment is estimated at 90 million euros ($100 million) and the operating Ebitda margin is estimated to significantly exceed 30 percent, which is in line with the group’s goals, it said.
The group’s ambition is to build a “strong pipeline” of potential biomethane plant projects in Northern Europe.
The German market is prioritized given its size, well-developed gas infrastructure and pro-biogas attitude, the firm said.
Production is, according to the company’s growth strategy, mainly based on manure and other organic waste from agriculture.
Also, the plan is to inject the biogas into the German gas network. Some or all the production may be liquefied, Scandinavian Biogas said.
The rot remains are post-processed into bio-fertilizer which is returned to nearby farms completing the cycle, it said.
“Entering the vast German market is a strategic milestone and an important addition towards our production targets in 2026 and 2030,” Matti Vikkula, president and CEO of Scandinavian Biogas, said in the statement.
“The very attractive German biogas market is in a transition process from electricity production to biomethane production, and we aim to be an important player in that transition,” he said.
Earlier this year, Scandinavian Biogas decided to build a new bio-LNG plant worth about $75 million in Monsteras, Sweden.
This move is a part of the company’s plans to reach a production capacity of 3 TWh in 2030, mainly bio-LNG.
Last year, Scandinavian Biogas also signed a long-term deal to supply bio-LNG to German fueling station operator Alternoil.