BP to acquire American RNG producer Archaea Energy for $4.1bn
BP acquisition of Archaea Energy : Oil and gas giant BP has announced a $3.3 billion all-cash deal to acquire Archaea Energy Inc., an American producer of renewable natural gas (RNG), in a move to expand and expedite the growth of its bioenergy business.
BP will also assume nearly $800 million of net debt of the RNG producer.
BP said that at the closing of the deal, Archaea Energy’s production will be expected to deliver an immediate 50% boost to its biogas supply volumes.
Commenting on BP acquisition of Archaea Energy, Dave Lawler — BP America chairman and president said: “Our biogas team is already one of the leading suppliers of renewable natural gas in North America. This deal accelerates our ability to deliver cleaner energy, generate significant earnings in a fast-growing sector and help reduce emissions. This could help bp take a significant stride toward our net zero ambition.”
The American RNG producer has a development pipeline of over 80 projects that could help grow its RNG production by nearly five times by 2030.
Earlier this year, Archaea Energy agreed to create a joint venture with Republic Services, Inc. to set up 40 RNG projects across the US. The Archaea Energy Republic Services joint venture plans to convert landfill gas into pipeline-quality RNG which can be used for displacing conventional natural gas.
Nick Stork — Archaea Energy CEO, commenting on BP acquisition of Archaea Energy, said: “Archaea has become one of the largest and fastest growing RNG platforms in the US and today’s announcement will further enable this business to realize its full potential.
“bp is a world-class partner with an operational history in the RNG value chain that is fully aligned with ours and our partners’, and I look forward to our hard-working team joining the bp organization to help achieve their bioenergy goals.”
The deal is subject to regulatory approvals and Archaea Energy’s shareholders’ approval.