Shell Petroleum NV, a wholly owned subsidiary of Shell plc (Shell), has reached an agreement with Davidson Kempner Capital Management LP, Pioneer Point Partners and Sampension to acquire 100% shareholding of Nature Energy Biogas A/S (Nature Energy) for nearly USD $2 billion (€ 1.9 billion). The acquisition will be absorbed within Shell’s current capital range, which remains unchanged, according to the company's release.
Based in Denmark, Nature Energy is a producer of Renewable Natural Gas (RNG) from agricultural, industrial, and household wastes.
By purchasing the shares in Nature Energy, Shell will acquire the largest RNG producer in Europe, its portfolio of cash generative 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.
This acquisition will further increase Shell’s ability to work with its established customer base across multiple sectors to accelerate its transition to net-zero emissions. It will also support Shell’s ambition to profitably grow its low carbon fuels production and customer offering in our world-leading customer-facing Marketing business.
The transaction is subject to regulatory approvals and is expected to close in Q1 2023. Nature Energy is cash generative, and the acquisition is expected to be both accretive to Shell’s earnings from completion and deliver double digit returns.
Nature Energy was founded in 1979 as a natural gas distributor. The company established its first biogas plant in Denmark in 2015 and now has 14 operating plants with associated infrastructure, feedstock arrangements, and current 2022 production of around 6.5 mln MMBtu/yr (3,000 boe/d1). The company also has a pipeline of around 30 new plant projects in Europe and North America. More than a third of these projects are in medium to late development stage in Denmark, the Netherlands and France and could deliver up to 9.2 mln MMBtu/yr (4,400 boe/d) by 2030, subject to future final investment decisions and relevant regulatory approvals. Nature Energy and its 420 employees located in Europe and North America will operate as a wholly owned subsidiary of Shell, initially under its existing brand.
RNG, also known as biomethane, is chemically identical to conventional natural gas and can be used in existing transmission and distribution infrastructure. This makes it a competitive option to help decarbonise multiple hard to abate sectors including commercial road transport, marine, heating and heavy industry. The sustainability benefits are amplified by the processing and use of methane that could otherwise be released to the atmosphere from the decomposition of organic by‑products and waste.
Shell has an existing RNG production business in North America, with one operational site and four under construction. Shell is a trader of RNG and has a wide range of RNG and bioLNG customers, including large corporate, road hauliers and marine customers.