BP has brought into the biogas sector, snapping up Clean Energy Fuels Corp's biomethane production assets for $155 million on March 1st. The move further expands its gas supply portfolio in the US and reflects a strategic shift toward less carbon-intensive projects.
BP said in a strategy update on Feb 28th that it was exploring new investments in low-carbon forms of energy, a part of the industry in which it sees significant future business potential.
Alan Haywood, CEO of BP’s supply and trading business said: “Demand for renewable natural gas is growing quickly and BP is pleased to expand our supply capability in this area. “BP is committed to supporting developments towards a lower carbon future and working with Clean Energy, we believe we will be well-positioned to participate in the growth of this lower carbon fuel in the US.”
BP will take over Clean Energy's existing and two new biomethane production sites as well as supply contracts from third parties, the companies said. As part of the deal, Clean Energy has also signed a long-term contract to purchase biomethane from BP.
The Clean Energy production units capture biomethane gas emitted from landfill waste sites and then processes and purifies it to pump through pipelines. It is mainly used as a fuel for transport, and is estimated to result in 70% lower greenhouse gas emissions than from equivalent gasoline or diesel fuelled vehicles.
Clean Energy will retain its green gas downstream business and continue supplying biomethane gas at its 550-plus fuelling stations. It will also continue to collect environmental credits on gas purchased from BP and sold to end-consumers. Clean Energy sold the equivalent of 60 million gallons of gasoline of the biomethane fuel last year, to customers including logistics firm UPS and the City of Santa Monica's transit agency.