Bioenergy BP to Acquire US Renewable Natural Gas Firm Archaea Energy

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With an aim to strengthen and expand its bioenergy business especially in the US, BP has plans to acquire Archaea Energy for 3.3 billion dollars in cash and around 800 million dollars of net debt. The move will assist BP as well as its customers to achieve their respective decarbonization goals.

London/UK – In a move that will expand and accelerate the growth of its strategic bioenergy business, BP recently announced that it has agreed to acquire Archaea Energy, a leading producer of renewable natural gas (RNG) in the US. The agreed acquisition, which is subject to regulatory and Archaea shareholder approval, will be for 3.3 billion dollars in cash, as well as around 800 million dollars of net debt.

Bioenergy is one of five strategic transition growth engines that BP intends to grow rapidly through this decade. BP expects investment into its transition growth businesses to reach more than 40 % of its total annual capital expenditure by 2025, aiming to grow this to around 50 % by 2030.

Acquiring Archaea will expand BP’s presence in the US biogas industry, enhancing its ability to support customers’ decarbonization goals and also progressing its aim to reduce the average carbon intensity of the energy products it sells. BP aims to reduce that carbon intensity to net zero 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.”

Bernard Looney, BP chief executive, said: “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.”

Based in Houston, Texas, Archaea Energy is a leading RNG producer, operating 50 RNG and landfill gas-to-energy facilities across the US, producing around 6,000 barrels of oil equivalent a day (boe/d) of RNG. At closing its production would be expected to provide an immediate 50 % increase to BP’s biogas supply volumes.

The acquisition of Archaea has a strong strategic fit with BP’s existing biogas business, enabling expansion of its position in the US and potentially also in key geographies globally, including the UK and Germany. Alongside growth in BP’s existing portfolio, the addition of Archaea’s production and pipeline has the potential to take BP’s biogas supply volumes to around 70,000 boe/d globally by 2030.

Dave Lawler, chairman and president of BP America, 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.”

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