Shell to Buy Danish Biomethane Producer in $2 Billion Deal

Shell PLC is expanding its renewable energy portfolio buying Denmark’s Nature Energy Biogas A/S it said Monday. Nature Energy is Europe’s biggest producer of biomethane from organic waste. The renewable fuel can replace conventional natural gas in heavy road and marine transport, industry and heating. Shell’s acquisition follows BP agreeing to buy U.S. biogas producer Archaea Energy Inc. for $3.3 billion plus debt, for a total of $4.1 billion six weeks ago. Chevron Corp. earlier this year paid $3.15 billion for Iowa-based Renewable Energy Group.

via Nature Energy

Nature Energy’s 2022 biogas production equates to about 3,000 oil-equivalent barrels a day of renewable natural gas, about half of Archaea’s.

There is an existing relationship between the companies. In July 2020 Nature Energy announced the world’s largest biogas agreement to date, a co-operation agreement with Shell, to whom they now sell biogas.

Shell said Monday that one of its subsidiaries agreed to buy Nature Energy from Davidson Kempner Capital Management LP, Pioneer Point Partners LLP and Danish pension-fund manager Sampension Livsforsikring A/S. Nature Energy has 420 employees in Europe and North America and will initially keep its brand name as a Shell subsidiary, the company said.

The biogas decomposition process releases methane, a harmful greenhouse gas. The goal is to cut emissions by processing the biogas into usable, transportable fuel.

How biogas is produced

There are millions of domestic animals in Denmark producing enormous quantities of manure, which is one of the raw materials Nature Energy uses to make biogas. Most of the biomass used in biogas plants is manure from farm animals.  Biogas is also made using residual waste from industrial food production, food waste from households and restaurants, discarded food from supermarkets, leaves of root vegetables and energy crops such as maize.

The organic waste is brought to the biogas plant and then sent on to the plant’s processing tanks (digesters). In the digester, which run at ca. 50 °C, bacteria convert biomasses into biogas and liquid fertiliser (digestate). Before the gas is sent to the natural gas grid, CO2 and the unpleasant toxic hydrogen sulphide is removed from the raw biogas. This is done in an upgrading unit. The gas can then be distributed as green energy throughout the country. 

Good manure is returned to farmers

Once the manure has been digested, it is sent back to farmers, who use it to fertilise their fields. This has several advantages compared to raw manure and landfill waste. The digestate will no longer produce methane, which is a potent greenhouse gas and harmful to the environment. The fertilizer value in digestate is better than in raw manure/waste, because the nutrients are more available to plants after digestion. The high process temperature is lethal to bacteria causing diseases like salmonella. A final key benefit for everyone is that digestate is significantly less smelly than untreated manure and landfills.

Nature Energy, which started in 1979 as a natural gas distributor, opened its first biogas plant in Denmark in 2015. It now has 14 biogas plants in operation and more than two dozen additional planned projects in Europe and North America. Nature Energy is now one of the world’s largest producers of biogas for the gas network.

Source: WSJ, Nature Energy

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