Energy transition

Shell To Spend Almost $2 Billion for Renewable Gas Producer

The UK-based supermajor is taking over Nature Energy, a company that specializes in turning manure and food waste into “CO2-neutral” natural gas.

Nature Energy has 14 biogas plants, including this one in Odense, Denmark.
Source: Nature Energy

Shell announced on 28 November that the company is purchasing Nature Energy in a deal it said is worth nearly $2 billion.

Shell highlighted that the Denmark-based Nature Energy is the largest producer of renewable natural gas (RNG), or biomethane, in Europe. The firm’s assets include 14 production plants (13 in Demark and one in the Netherlands) with a current production of about 3,000 BOE/D.

Terms of the deal will see Shell acquire the entirety of the company’s shares from an investment consortium made up of a pension management fund and private equity investors.

Shell noted Nature Energy is profitable and that it considers the billion-dollar move to be a big step forward in its goal to become a net-zero emitter by 2050.

The London-based supermajor operates one RNG facility in North America and is building four others. The new acquisition includes Nature Energy’s associated feedstock supply chain, infrastructure, and about 30 new RNG facilities that are in various stages of planning.

About a third of these projects are in the later stages of development and could add an additional 4,400 BOE/D to Nature Energy’s current output.

“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 at a time when energy transition policies and customer preferences are signaling strong growth in demand in the years ahead,” Huibert Vigeveno, downstream director for Shell, said in a statement.

Nature Energy notes on its website that it plans to treat more than 4.4 million metric tons of biomass this year from animal manure, industrial food processing waste, and household food waste.

The RNG that is produced with the help of bacteria inside Nature Energy’s digester tanks is touted as “CO2 neutral” and flows from its plants into existing natural gas pipeline networks. A byproduct of the firm’s process includes liquid fertilizers and processed manure that can be sent back to the same farms that supply the necessary feedstock.

The plan to purchase Nature Energy follows other recent deals that are reshaping the RNG market. In October, fellow supermajor BP announced a cash-and-debt deal worth $4.1 billion to buy US RNG producer Archaea Energy.

Shell said that the deal is expected to close in the first quarter of next year, pending regulatory approvals.