Shell to acquire renewable natural gas producer Nature Energy

Shell Petroleum NV, a wholly owned subsidiary of Shell plc (Shell), has reached an agreement with Davidson Kempner Capital Management LP, Pioneer Point Partners and Sampension to acquire 100% shareholding of Nature Energy Biogas A/S (Nature Energy) for nearly USD2 bn (EUR1.9 bn), said the company.

The acquisition will be absorbed within Shell’s current capital range, which remains unchanged. Based in Denmark, Nature Energy is a producer of Renewable Natural Gas (RNG) from agricultural, industrial, and household wastes.

By purchasing the shares in Nature Energy, Shell will acquire the largest RNG producer in Europe, its portfolio of cash generative operating plants, associated feedstock supply and infrastructure, its pipeline of growth projects and its in-house expertise in the design, construction, and operation of innovative and differentiated RNG plant technology.

This acquisition will further increase Shell’s ability to work with its established customer base across multiple sectors to accelerate its transition to net-zero emissions. It will also support Shell’s ambition to profitably grow its low carbon fuels production and customer offering in our world-leading customer-facing Marketing business.

“Shell’s competitiveness in low carbon fuels derives from capabilities across the value chain, combining a world-class Trading and Supply organisation with access to differentiated technology and production assets,” said Huibert Vigeveno, Shell’s Downstream Director. “Acquiring Nature Energy will add a European production platform and growth pipeline to Shell’s existing RNG projects in the United States. We will use this acquisition to build an integrated RNG value chain at global scale, at a time when energy transition policies and customer preferences are signalling strong growth in demand in the years ahead.”

The transaction is subject to regulatory approvals and is expected to close in Q1 2023. Nature Energy is cash generative, and the acquisition is expected to be both accretive to Shell’s earnings from completion and deliver double digit returns.

We remind, Shell Chemical Appalachia LLC announced it has commenced operations of its Pennsylvania Chemical project, Shell Polymers Monaca (SPM). The Pennsylvania facility is the first major polyethylene manufacturing complex in the Northeastern United States and has a designed output of 1.6 MMt annually.
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QatarEnergy and ConocoPhillips have signed two sales and purchase agreements to export liquefied natural gas to Germany for at least 15 years starting 2026 – the first such supply deal to Europe from Qatar’s North Field expansion project, said Reuters.

The agreement will provide Germany with two million tonnes of LNG annually, arriving from Ras Laffan in Qatar to Germany’s northern LNG terminal at Brunsbuettel, QatarEnergy’s chief executive said.

“The agreements mark the first ever long-term LNG supply agreement to Germany, with a supply period that extends for at least 15 years, thus contributing to Germany’s long-term energy security,” CEO Saad Al Kaabi said in a joint news conference with ConocoPhillips CEO Ryan Lance.

The agreement comes as the European economic powerhouse scrambles to replace Russian gas supplies that have been cut during the ongoing war in Ukraine. Officials gave no dollar value for the deal.

As European countries supported Ukraine after Russia’s invasion in February, Moscow slashed supplies of natural gas used to heat homes, generate electricity and power industry, creating an energy crisis that is fueling inflation and increasing pressure on companies as prices rose.

Germany, which got more than half its gas from Russia before the war, has not received any LNG from Russia since the end of August.

We remind, QatarEnergy has chosen Italy’s Eni, US major ConocoPhillips, and supermajor ExxonMobil as its newest strategic partners in the North Field East Expansion (NFE), joining France’s TotalEnergies on a growing roster of international players that will develop the LNG industry’s largest project to date. For Eni, NFE will be the its first foray into Qatar’s upstream sector, while ConocoPhillips, ExxonMobil, and TotalEnergies share long histories in the country's LNG industry.
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SABIC has announced plans to set up a crude oil-to-chemicals (COTC) complex in Ras Al-Khair, Saudi Arabia, said Chemanager-online.

The complex is expected to convert 400,000 bbl/day of oil, the company said in a statement to the Tadawul stock exchange.

The project, said SABIC, is part of its strategic growth plans, as well as contributing to the realization of the Kingdom’s program to convert oil and its liquids into chemicals. The company added that the proposal also “affirms its commitment to continue developing COTC technologies, which contribute to increasing cost efficiencies and value creation opportunities in the energy and chemical industry on a larger scale.”

According to local media reports, Saudi Arabia’s energy minister Abdulaziz bin Salman said during the opening of a SABIC building in Jubail that the COTC project will be undertaken as a joint venture with parent company Saudi Aramco and be completed “in the coming years.” He cited strong demand from the global petrochemicals industry for oil, with growth to accelerate by 60% until 2040.

SABIC is also developing a COTC complex in Yanbu. It said in October 2020 that it was reevaluating the project’s scope to include the integration of Aramco’s existing refineries at the site.

We remind, SABIC posted a 67.1% year-on-year drop in its third quarter net profit on the back of higher costs despite an increase in sales volumes. The company's third-quarter net income was weighed by higher cost of sales and an increase in selling and distribution costs.

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Invista (Wichita, Kan.) announced that INVISTA Nylon Chemicals (China) Co. held the inauguration ceremony for its new adiponitrile (ADN) plant at the Shanghai Chemical Industry Park (SCIP), said Chemengonline.

Being a critical part of INVISTA’s integrated nylon 6,6 value chain, the plant, which is a more than 7 billion RMB (over 1 billion USD) investment, has a capacity of 400,000-ton/year and is the largest capital project in in the company’s history. The plant will further boost local production capability for nylon 6,6 and help accelerate the high-quality upgrades of the Chinese chemical industry.

The ADN plant inauguration is one of the core activities of SCIP’s Integrated Nylon Base launch event. Zhang Wei; member of the Standing Committee of the CPC Shanghai Municipal Committee, vice mayor of Shanghai Municipal People’s Government and Fu Xiangsheng, vice chairman of China Petroleum and Chemical Industry Federation sent congratulatory videos; Ma Jing, director general of Shanghai Chemical Industry Park Administrative Committee; and other officials from related Shanghai Municipal Government agencies and representatives of SCIP attended the event. INVISTA senior executives included Gary Knight, global vice president of Operations, INVISTA Nylon Enterprise; Kyle Redinger, vice president of Nylon Intermediates, Asia Pacific; and Angela Dou, director of Intermediates, Asia. Jeff Gentry, INVISTA chairman and CEO, shared remarks via video.

“We are excited about the completion of ADN plant and are grateful for SCIP’s support through the entire project,” said Gary Knight, “INVISTA believes that China will be the largest consumer for nylon 6,6 in the near future, and the plant reinforces our long-term commitment by providing the key building block to produce nylon polymers. Together with our partners and customers, we hope to realize the full potential of the nylon industry and downstream applications areas.”

“Today we are here to witness the signing, groundbreaking and start-up of several projects, which are led by the INVISTA ADN project that further enhances the efficiency and stability of the nylon 6,6 value and supply chains. These projects, like ‘water from the source,’ will contribute to Shanghai’s nylon industry development and future material industrial zones,” said Zhang Wei.

The new plant deploys INVISTA’s most advanced, proprietary, butadiene-based adiponitrile technology. In addition to advantages in commercial scale and overall efficiency, INVISTA’s ADN technology and manufacturing process result in up to 60% lower greenhouse gas emissions compared to propylene-based ADN and up to 80% lower greenhouse gas emissions compared to adipic acid-based ADN *. Once in full operation, the new plant can support 800,000 tons of nylon 6,6 production every year.

In line with the need for reduced cost and improving demand, INVISTA’s nylon 6,6 value chain integrates the recently opened INVISTA Asia Innovation Center and existing HMD and polymer sites, providing a comprehensive capability ranging from application development and raw materials to high-performance polymer supply. ADN can be used to make nylon polymer, fibers and other specialty materials such as hexamethylene diisocyanate (HDI) for coatings.

During the event, INVISTA also announced the start of construction for the project to double its nylon 6,6 polymer capacity to 400,000-ton/year.

We remind, Invista celebrated the completion of its technical lab expansion in Lugoff after six months of successful operation. The company invested more than USD5 million in research and development at the site, a nylon fiber manufacturing facility.

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Brenntag SE late Friday confirmed that it was in preliminary discussions over a possible takeover of Illinois-based Univar Solutions Inc., said Reuters.

The German chemical company said discussions over acquiring the U.S. specialty-chemical distributor are continuing but that there were no concrete results or agreements yet.

"Accordingly, it is currently not foreseeable whether there will be any kind of transaction," Brenntag said.

Univar's 2021 sales were USD9.54 billion and net profit was USD460 million, it said in its annual report.

Brenntag earlier this month launched a new strategic growth plan with targets to 2026, including doubling its mergers and acquisitions spending to 400 million-500 million euros (USD416 million-USD520 million) a year.

We remind, Brenntag has acquired the life sciences and coatings business from a fellow distributor in the Australia and New Zealand region. The acquisition from Ravenswood, a specialties distributor with an expertise in blending, is expected to close on 2 December.

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