BP wraps up $4.1bn acquisition of US RNG producer Archaea Energy

British multinational oil and gas company BP has completed the previously announced acquisition of Archaea Energy, a renewable natural gas (RNG) producer, for an enterprise value of around $4.1bn, including about $800 million of net debt.

BP is anticipated to increase the company’s footprint in the US biogas industry.

The acquisition is also expected to help BP lower its carbon intensity to net zero by 2050 and enhance its ability to support customers’ decarbonization goals.

BP is expected to increase its biogas supply volumes by 50% and reduce the average lifecycle carbon intensity of the energy products it sells, following the completion of the transaction.

Houston, Texas-based Archaea Energy operates 50 RNG and landfill gas-to-energy facilities across the US and manufactures approximately 6,000 barrels of oil equivalent a day of RNG.

BP wraps up $4.1bn acquisition of US RNG producer Archaea Energy. Logo courtesy of PRNewsfoto/BP.

Archaea Energy has a development pipeline of more than 80 projects with the potential to increase the company’s RNG production around five-fold by 2030.

Dave Lawler — BP America chairman and president said: “We see enormous opportunity to grow our bioenergy business by bringing Archaea fully into bp.

“The talent, expertise and passion of their team has let them achieve incredible growth so far, and we’re excited to support the next chapter in line with our strategy.”

Archaea Energy will operate as a subsidiary within bp and its common shares will cease to be listed on the NYSE.

In October, BP agreed to acquire Archaea Energy as part of the former’s five strategic transition growth businesses, including bioenergy to grow rapidly.

BP said it anticipates investment into its transition growth businesses to reach over 40% of its total yearly capital expenditure by 2025, and approximately 50% by 2030.