Vitol to buy RNG from Waga Energy; assessing minority stake acquisition


Vitol, the world’s biggest oil trader, announced this Monday it will buy renewable natural gas from Waga Energy, a European leader in methane recovery from landfill waste. The two companies signed a Memorandum of Understanding, in which a minority stake acquisition of Waga is also a part of.

Firstly, the minority stake acquisition of Waga Energy is part of Vitol’s moves to expand its clean energy portfolio. According to Vitol’s statement, the acquisition would happen on Waga’s initial public offering on the Paris Euronext exchange.

On the other hand, the marketing deal outlined in the MoU establishes that Vitol will get a right of first refusal on all volumes of renewable gas from future Waga projects as they come online.

Moreover, the MoU also implies that the waste methane would be supplied under 10-year purchase contracts; and that Vitol and Waga Energy will also cooperate on all new projects in Europe.

In addition, Waga Energy owns the technology to recover landfill gas into biomethane. Indeed, the company offers an economically viable solution to capturing landfill emissions; treating the biomethane, and also injecting it into the grid. As a result, the biogas acts as a substitute for fossil-based natural gas and can also serve the transportation sector.

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Vitol expanding its renewable energy solutions portfolio

Consequently, the acquisition of a minority stake by Vitol aligns with the company’s strategy to deliver low-carbon solutions. About such, Vitol said in its statement. “Vitol’s investment in Waga Energy is aligned with its core strategy of building strategic relationships with leading green energy producers to participate in the development of green energy product markets.”

The company also added that it expects demand for RNG to increase; especially as Europe pushes ahead with its clean energy package to cut its carbon footprint. However, this solution can also be a useful tool in the face of an energy crisis like Europe, and Asia are going through regarding energy prices.

Furthermore, Vitol is investing in clean energy projects and has earmarked over $1 billion for spending on renewable projects, including wind, solar, and renewable natural gas projects. In fact, the trader has previously invested in a US project to produce biogas from organic waste.

Finally, last month, Vitol acquired a majority share in Liquind; a German-based supplier of gas-for-transport in Northwest Europe, looking to develop biogas for transport. In April, it acquired a 10% equity interest in Gen2 Energy, a Norwegian producer of green hydrogen.

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