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British energy giant bp is expanding into bioenergy and has agreed to buy US biogas producer Archaea Energy in a deal worth $1.4 billion (£1.2bn).

The acquisition, subject to regulatory and shareholder approval, will expand bp’s presence in the US biogas industry and enhance its ability to support its customers’ decarbonisation goals and its ambition to reduce carbon intensity to net zero by 2050 or sooner.

Texas-based Archaea Energy operates 50 renewable natural gas (RNG) and landfill gas-to-energy facilities across the US, producing around 6,000 barrels of oil equivalent a day (boe/d) of RNG.

It also has a development pipeline of more than 80 projects which supports the potential for around five-fold increase in RNG volumes by 2030.

Alongside the growth in bp’s existing portfolio, the addition of Archaea’s production and pipeline has the potential to take bp’s biogas supply volumes to around 70,000 boe/d globally by 2030.

Bernard Looney, bp Chief Executive Officer said: “Archaea is a fantastic fast-growing business, and bp will add distinctive value through our trading business and customer reach. It will accelerate our key bioenergy growth engine, creating a real leader in the biogas sector and support our net zero ambition. And, importantly, we’re doing this while remaining focused on the disciplined execution of our financial frame.

“Investing with discipline into the energy transition, creating further value through integration – this is exactly what bp’s transformation into an integrated energy company is all about.”

The deal is expected to be completed by the end of 2022.