LONDON (Reuters) – Fuel trader and refiner Varo Energy, owned by Carlyle and energy trader Vitol, told Reuters on Thursday it had bought an 80% stake in Dutch biogas maker Bio Energy Coevorden BV (BEC) with a view to doubling its capacity by 2026.
The deal follows advances by other oil firms into biogas, captured from organic waste in landfills or farms, including multibillion dollar acquisitions by BP and Chevron as the sector hunts for non-fossil fuel feedstocks for fuel production, power generation or heating.
The acquisition, which Varo said is its largest since 2015, was announced about a year after Dev Sanyal took over as chief executive officer of the company following three decades at BP where he last served as the head of gas and low carbon energy.
Varo, headquartered in Zug, Switzerland, declined to say how much it paid for the stake in the Dutch group, which it bought from STAK Grisbe and VanDrie Group. Those firms will continue to own 15% and 5% stakes, respectively, once the deal is closed, which is expected to happen in February.
“We are investing hundreds of millions of dollars … The transaction is in a very good neighbourhood, it straddles Holland and Germany,” which is a demand growth centre, Sanyal told Reuters.
In July, Varo said it would invest around $3.5 billion until 2026, with two-thirds of the money going to its sustainable energies business, while around $140 million per year will sustain capital expenditure in hydrocarbons.
Varo, which has pledged to become net carbon zero by 2040, wants to increase BEC’s capacity from 300 gigawatt-hours (GWh) to 650 GWh by 2026, which would make it one of the three largest biogas facilities in Europe with an investment of 65 million euros ($69.84 million).
($1 = 0.9308 euros)
(Reporting by Shadia Nasralla; Editing by Paul Simao)