Shell is joining the other majors in the energy business in building an expanded presence in the supply of biomethane, which is viewed as one of the leading emerging alternative fuels for industries including shipping. Shell announced it will acquire Nature Energy Biogas, the largest producer of renewable natural gas (RNG) in Europe.
Founded in 1979 and headquartered in Denmark, Nature Energy has been moving aggressively to expand its operations and build its business pipeline. Currently, the company owns and operates 14 industrial-scale biomethane plants producing approximately 180mm m3 (c. 6.5mm MMBtu/yr) of biomethane. One additional plant is currently under construction in France and the company has a development pipeline for approximately 30 additional plants across Europe and North America.
In a deal valued at nearly $2 billion, Shell will acquire the company with its portfolio of operating plants, associated feedstock supply and infrastructure, its pipeline of growth projects, and its in-house expertise in the design, construction, and operation of innovative and differentiated RNG plant technology. According to Shell, the acquisition will further increase its ability to work with its established customer base across multiple sectors to accelerate the transition to net-zero emissions.
The sale completes a process launched by the current investment group that consists of Davidson Kempner Capital Management, Pioneer Point Partners, and Sampension. Shell will acquire 100 percent of the investors’ shareholding of Nature Energy Biogas.
“Acquiring Nature Energy will add a European production platform and growth pipeline to Shell’s existing RNG projects in the United States,” said Huibert Vigeveno, Shell’s Downstream Director. “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 signaling strong growth in demand in the years ahead.”
Over the last five years, Nature Energy has experienced a phase of intensive organic and inorganic growth through strategic investments, with the number of plants in operation increasing from 4 to 14 and its biomethane production growing from 37mm m3 (c. 1.3mm MMBtu/yr) to approximately 180mm m3 (c. 6.5mm MMBtu/yr). Nature Energy has developed a series of technology-led initiatives to increase the biomethane yield and monetize other output streams.
Derived from agricultural, industrial, and household wastes, Biomethane is chemically identical to natural gas. After a purification process that includes separating carbon dioxide from the gas, the product can then be treated identically to natural gas.
Shell has been building its presence in renewable natural gas including building its first biomethane plants in North America as part of an effort to diversify away from fossil fuels. The acquisition follows other majors that have sought to consolidate and expand the biomethane industry. TotalEnergies and Engie have also made recent investments into the sector while shipping companies including CMA CGM and Maersk are working aggressively to invest in and support the development of a global biomethane industry.