RNG producer Archaea Energy being acquired by oil giant bp for approximately $4.1B

Oct. 17, 2022
Houston-based Archaea operates 50 RNG and landfill gas-to-energy facilities across the U.S. These facilities produce about 6,000 barrels of oil equivalent in RNG per day

Oil and gas giant bp (historically known as British Petroleum) has added another piece in its moves toward renewable fuels and zero-carbon outcomes.

The company is acquiring renewable natural gas (RNG) producer Archaea Energy Inc. The transaction, once approved by regulators and Archaea shareholders, is valued at close to $3.3 billion in cash and $800 million in debt.

Archaea develops and produces RNG from landfills and other waste products. Bioenergy is one of five strategies that bp wants to pursue for future growth.

“Archaea is a fantastic fast-growing business, and bp will add distinctive value through our trading business and customer reach,” bp CEO Bernard Looney said in a statement. “It will accelerate our key bioenergy growth engine, creating a real leader in the biogas sector, and support our Net Zero ambition.”

Earlier this month, EnergyTech reported on Archaea Energy agreeing to a joint venture with waste disposal firm Republic Services to develop an RNG facility at Republic’s Middle Point Landfill in Murfreesboro, Tennessee.

The Archaea-Republic joint venture will be called Lightning Renewables. The Middle Point project is part of a first phase of 39 RNG deals planned at landfills owned or operated by Republic.

Gas generator-microgrid firm Enchanted Rock also is developing RNG projects, including an agreement with tech giant Microsoft to produce the biofuel for a data center.

Houston-based Archaea operates 50 RNG and landfill gas-to-energy facilities across the U.S. These facilities produce about 6,000 barrels of oil equivalent in RNG per day, according to the company. The waste removed from landfills otherwise would emit vast amounts of methane gas, considered by environmental scientists as more harmful as a greenhouse gas than even carbon dioxide.

A British multinational oil exploration and production firm with thousands of interests in drilling globally, bp publicly has vowed to focus on dramatically lowering its carbon footprint in coming decades. Among those decarbonization moves include investments in electric vehicle charging, hydrogen and carbon capture projects.

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(Rod Walton, senior editor for EnergyTech, is a 14-year veteran of covering the energy industry both as a newspaper and trade journalist. He can be reached at [email protected]). 

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