Shell has reached the next round of bidding to acquire the Danish biogas producer Nature Energy.

Shell has joined the group of companies bidding to acquire the Danish biogas producer ‘Nature Energy’, as the energy companies race to boost low-carbon businesses.

Three sources have stated that Nature Energy could value at around $2 billion, and the sale is expected to close by the end of this year. Biogas has sparked interest amongst many as it is produced from agricultural and other biological waste. It could substitute some of the fossil fuels that maintain the functioning of our world’s major economies.

According to Reuters and its sources, Nature Energy accepted initial offers for the second round of bidding in the last week of September. Although, it is unclear to what other companies apart from Shell have reached the next round of bidding. Both Shell and Nature Energy refused to comment, as well as JP Morgan, who is currently running the sale process for the biogas firm’s current owners. 

The biogas producer operates 12 plants in Denmark and one in France. According to its website, it also has various others in the pipeline. The firm plans to treat 4.4 million tonnes of waste by the end of 2022 and convert them into 181 million cubic meters of green gas. The green gas could then be utilised within transport or home heating services.

According to two different sources, BP, Hong Kong’s CK Infrastructure Holdings and Repsol were also contenders in the bidding but did not progress to the next round. However, one of the reasons why BP perhaps pulled out is because on Monday the company agreed to buy U.S.based natural gas producer ‘Archaea Energy Inc’. For approximately $4.1 billion.    

The fight for replacement fuels has been heavily prompted this year by Russia’s invasion of Ukraine, forcing prices higher and creating disruptions in supply.

Shell is already a customer of Nature Energy, as in 2020 it signed up to buy some of its biomethane. Therefore, maybe the current relationship between the two could have an impact on the bidding.

(sources: reuters.com, investing.com)