Published by Jessica Weisman-Pitts
Posted on October 18, 2022
By Ron Bousso and Isla Binnie
LONDON (Reuters) – Shell is among a number of companies joining a second bidding round to acquire Danish biogas producer Nature Energy, three sources familiar with the matter said, as energy firms race to boost low-carbon businesses.
The sale is due to close by the end of this year and could value Nature Energy at around $2 billion, the sources said.
It comes amid growing interest in biogas, which is produced from agricultural and other biological waste and could replace some of the fossil fuels that keep the world’s major economies running.
BP on Monday agreed to buy U.S.-based renewable natural gas producer Archaea Energy Inc for about $4.1 billion. It aims to grow its production five-fold by 2030.
Nature Energy accepted initial offers for the second round of bidding in the last week of September, two sources told Reuters.
It was unclear which other companies apart from Shell reached the second bidding round.
Shell declined to comment. Nature Energy declined to comment.
JP Morgan is running the sale process for Nature Energy’s current owners, asset manager Davidson Kempner, European private equity fund Pioneer Point Partners and Danish pension fund Sampension.
JP Morgan declined to comment.
Nature Energy operates 12 biogas plants in Denmark and one in France and has others in the pipeline, according to its website. It plans to treat 4.4 million tonnes of waste in 2022 and convert them into 181 million cubic metres of green gas, which can be used for transport or home heating. BP and Repsol also considered bids for the business, but both dropped out, two sources familiar with the matter said.
Hong Kong’s CK Infrastructure Holdings also worked on a bid but has not progressed to the second round, two sources said.
BP, Repsol and CK Infrastructure Holdings did not immediately respond to requests for comment.
The scramble for alternative fuels has taken on fresh urgency this year as Russia’s invasion of Ukraine forced up the price of natural gas and exposed import-dependent Europe’s vulnerability to interruptions in supply.
Shell is already a customer of Nature Energy’s, having signed up in 2020 to buy some of its biomethane, a product which still depends on government support and has yet to see the breakthroughs in technology and scale seen in wind and solar power.
(Reporting by Ron Bousso and Isla Binnie; Editing by Susan Fenton)
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