Shell to buy Europe’s biggest biogas producer for €1.9bn


Shell has agreed to buy Europe’s largest biogas producer for €1.9bn within the UK oil main’s newest effort to diversify its vitality portfolio and cut back its dependence on fossil fuels

The deal for Denmark’s Nature Energy is an indication of the business’s rising curiosity in so-called renewable pure fuel after rival BP final month introduced the deliberate $4.1bn acquisition of Archaea Energy, a US-listed biogas producer.

Biomethane is chemically similar to pure fuel however produced by processing agricultural, industrial and family waste.

Nature Energy, based in 1979 as a pure fuel distributor, established its first biogas plant in Denmark in 2015. It now has 14 crops and produces about 3,000 barrels of oil equal a day of biomethane.

Shell produced about 3.2mn boe/d of crude and pure fuel final yr.

Huibert Vigeveno, Shell’s downstream director, stated vitality transition insurance policies and buyer preferences signalled “strong growth in demand [for biogas] in the years ahead”, including that Shell would use the acquisition to construct out a world enterprise for the gasoline.

“Acquiring Nature Energy will add a European production platform and growth pipeline to Shell’s existing RNG projects in the United States. We will use this acquisition to build an integrated RNG value chain at global scale.”

Biogas is produced primarily utilizing waste from crops, animal manure and industrial exercise by way of “anaerobic digestion”, a course of by which micro organism break down natural matter in an oxygen-free setting. This is then purified into biomethane by extracting carbon dioxide and may then be handled identically to pure fuel within the pipeline community.

The sector is making an attempt a transition from a fragmented, cottage business to industrial-scale operations. Shell began its first biomethane facility within the US final September and has three extra beneath building in North America.

In Europe, TotalEnergies has partnered with Veolia to produce biomethane from waste water, whereas Engie and container delivery big CMA CGM in June agreed to co-invest in a biomethane plant within the French port metropolis of Le Havre.

The EU is pushing for a fast enhance in biogas manufacturing because the bloc seeks to cut back its reliance on pure fuel from Russia. It has doubled its biomethane manufacturing goal to 35 bcm by 2030.

Nature Energy chief government Ole Hvelplund stated the corporate was enthusiastic about its potential “to help address both the current energy insecurity, as well as the longer-term potential for biomethane capacity set out in the REPowerEU plan”. However, in July he informed the Financial Times it could take no less than two years to considerably ramp up provide given the time required to safe permits and assemble crops.

The firm and its 420 workers in Europe and North America will initially function as a Shell subsidiary beneath its current Nature Energy model, Shell stated.

The acquisition from present shareholders Davidson Kempner Capital Management, Pioneer Point Partners and Sampension is predicted to shut within the first quarter of 2023, topic to regulatory approvals.

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