Shell is buying Europe's largest producer of biomethane for nearly $2 billion

Shell Oil, a wholly-owned subsidiary of Shell, has reached an agreement to acquire a 100% stake in Natural Energy Biogas, a renewable natural gas producer headquartered in Denmark, for nearly $2 billion.

Shell said it would acquire Europe's largest RNG producer by acquiring a stake in Natural Energy. The acquisition will include its portfolio of cash-generating operating plants, associated feedstock supply and infrastructure, pipeline of growth projects, and its in-house expertise in the design, construction and operation of innovative and differentiated RNG plant technologies.

This will further strengthen Shell's ability to work with existing customers across multiple industries and accelerate the transition to net zero.

In addition, the acquisition will support Shell's ambitions to achieve profitable growth in its low-carbon fuel production.

The transaction is subject to regulatory approval and is expected to close in the first quarter of 2023.

The acquisition of Nature Energy will add a European production platform and growth pipeline to Shell's existing RNG program in the United States. With energy transition policies and customer preferences indicating strong demand growth in the coming years, we will use this acquisition to build an integrated RNG value chain globally," said Huibert Vigeveno, Shell's Director of Downstreaming.

Natural Energy owns and operates 14 industrial-scale RNG (also known as biomethane) plants and an international development pipeline of approximately 30 plants throughout Europe and North America.

The company is currently owned by a consortium of institutional investors, including Davidson Kempner Capital Management LP, Pioneer Point Partners and Sampension.