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Shell closes $2bn acquisition of Europe’s largest renewable natural gas producer

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Shell’s wholly-owned subsidiary Shell Petroleum has closed the acquisition of Danish renewable natural gas (RNG) producer Nature Energy Biogas in a deal worth approximately $2 billion.

Renewable natural gas is a term used for biogas produced from multiple sources, including livestock waste, landfills, wastewater sludge, food waste and other organic waste operations.

The end result can be used for electricity generation, heating, cooking, bioplastics and vehicle fuel.

With the acquisition, Shell Petroleum added Nature Energy’s projects to its own portfolio, including operating plants, associated feedstock supply and infrastructure, and a pipeline of growth projects.

Additionally, Shell inherits Nature Energy’s in-house expertise in the design, construction, and operation of innovative and differentiated renewable natural gas plant technology.

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The acquisition is in line with Shell’s goal to build an integrated renewable natural gas value chain at global scale and to profitably grow its low-carbon offerings to customers across multiple sectors, the company said.

According to sources, Denmark-based Nature Energy was acquired from a consortium of institutional investors comprising Pioneer Point Partners, Davidson Kempner Capital Management, and Sampension, together called NGF Partnership.

The deal was signed in November 2022. The acquisition includes Nature Energy’s portfolio of operating plants and its associated feedstock supply and infrastructure pipeline of approximately 30 new plant projects in Europe and North America.

“Nature Energy is a cash-generative business, and the acquisition is expected to be accretive to Shell’s earnings from completion and to deliver double-digit returns. Shell will generate additional value in our unsurpassed customer access and global scale in our trading and supply chain positions,” Shell said in a statement.

The Danish firm owns 14 industrial-scale biomethane plants, with related infrastructure and feedstock arrangements.

Nature Energy will now operate as Shell’s wholly-owned subsidiary. It will be operated initially under its existing brand.

Shell, which has an existing RNG production business in North America, said the acquisition adds new volumes and supports its transition to growing its liquefied natural gas (LNG) customer base in Europe to BioLNG.

By 2050, Shell aims to be a net-zero emissions energy business