BP stated today (17th October 2022) that it has agreed to purchase Archaea Energy Inc, a major producer of biomethane in the United States, in a move that would extend and accelerate the expansion of its strategic bioenergy business.
BP has announced it plans to acquire Archaea Energy, a US-based renewable natural gas producer for a total consideration of $3.3 billion and a further $800 million in net debt. The deal is subject to regulatory and Archaea shareholder approval.
The acquisition of Archaea will increase bp’s position in the US biogas business, boosting capacity while also moving the company closer to its goal of reducing the average carbon intensity of the energy products it sells. BP seeks to achieve net zero carbon intensity by 2050 or sooner.
“Archaea is a fantastic fast-growing business, and bp will add distinctive value through our trading business and customer reach. It will accelerate our key bioenergy growth engine, creating a real leader in the biogas sector, and support our net zero ambition. And, importantly, we’re doing this while remaining focused on the disciplined execution of our financial frame. Investing with discipline into the energy transition, creating further value through integration – this is exactly what bp’s transformation into an integrated energy company is all about.” said Bernard Looney, BP chief executive.
Renewable natural gas (RNG), also known as biomethane, is gas from organic matter which has been upgraded to sufficient quality to enter the gas network. Often considered a substitute or transition fuel in the journey from fossil fuel, RNG is considered carbon neutral as it is derived from organic sources, though it isn’t carbon zero. Renewable Natural Gas can be used interchangeably with fossil-fuel-based natural gas, including as a transport fuel.