Shell to Acquire Denmark’s Nature Energy

29.11.2022 - Shell has sealed a definitive agreement to buy Europe’s largest biogas producer, Denmark’s Nature Energy, for €1.9 billion. The move is being seen as another sign of a former oil major’s effort to diversify its portfolio and reduce the dependence on fossil fuels that put it on the energy map.

The transaction, which is expected to close in Q1 2023, subject to regulatory approvals, is said to be cash generative and expected to be both immediately accretive to Shell’s earnings from the outset and deliver double digit returns. 

With Nature Energy part of its far-flung assets, Shell said it will become the owner of Europe’s largest producer of renewable natural gas (RNG, an alternate name for biomethane) from agricultural, industrial, and household wastes.

With the deal, the formerly Dutch oil group, now London-headquartered, said it will also acquire a portfolio of cash generative operating plants, an associated feedstock supply and infrastructure, along with a pipeline of growth projects and Nature Energy’s in-house expertise in RNG plant technology.

Additionally, Shell said the buy will enhance its ability to work with its established customer base across the multiple sectors toward accelerating its transition to net-zero emissions and growing its low carbon fuels production and customer offering.

The Danish company, presently owned by a consortium of institutional investors collectively known as the NGF Partnership, was founded in 1979 as a natural gas distributor and opened its first biogas facility it in 2015.

Based in Odense, Nature Energy now has 14 plants in operation and produces about 3,000 bbl/d oil equivalent of biomethane. It also has a pipeline of around 30 new plant projects in Europe and North America. More than a third are in medium to late stage developme in Denmark, the Netherlands and France.

The company and its 420 employees located in Europe and North America will operate as a wholly owned subsidiary of Shell, initially under its existing brand. Shell started its first biomethane facility in the US in September and has four more plants under construction in North America.

“Acquiring Nature Energy will add a European production platform and growth pipeline to Shell’s existing RNG projects in the US,” downstream director Huibert Vigeveno said, adding that energy transition policies and customer preferences signal strong growth in demand in the years ahead. “We will use this acquisition to build an integrated RNG value chain at global scale.”

The Shell-Nature Energy deal follows BP’s agreed $4.1 billion takeover of Archaea Energy, a US-listed biogas producer, which was announced in October. According to the Reuters news agency, both BP and Spain’s Repsol had been expected to bid for Nature Energy, but in the end did not.

Author: Dede Williams, Freelance Journalist