Shell to pay $2bn for Danish biogas producer

Shell is to pay $2bn to buy Danish renewable natural gas (RNG) producer Nature Energy Biogas.

After some months of speculation about a deal between the two companies, they announced late on Monday that they had agreed a takeover that will see Shell pay almost €1.9bn. Shell said that the amount will be paid out of its current capital spending budget — which the company estimates will fall between $23bn and $27bn this year.

Nature Energy is Europe's largest producer of RNG, producing gas from agricultural, industrial and domestic waste. The deal includes Nature Energy's portfolio of operating plants, associated feedstock supply and infrastructure, a pipeline of some 30 new plant projects and in-house expertise in the design, construction and operation of RNG plant technology.

Shell said the acquisition will further increase its ability to work with its customers across several sectors to accelerate its transition to net-zero emissions, while also supporting its ambition to profitably grow low-carbon fuels production. "Acquiring Nature Energy will add a European production platform and growth pipeline to Shell's existing RNG projects in the US," Shell downstream director Huibert Vigeveno said. "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 signalling strong growth in demand in the years ahead."

Biofuels businesses are proving to be popular acquisition targets for the European majors. Last month, BP agreed a $4.1bn deal to buy US biogas producer Archaea.

By Jon Mainwaring