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Vitol to buy renewable gas, acquire stake in French biogas player Waga Energy

Highlights

MOU gives right to buy future biogas for five years

Waga owns IP for biomethane capture, treatment

Vitol expanding its low-carbon, renewables business

Vitol has agreed a preliminary supply deal to buy renewable natural gas from Waga Energy, a European leader in methane recovery from landfill waste, and acquire a minority equity stake in the company as part of moves to expand its clean energy portfolio, the commodity trading group said Oct. 18.

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Under a strategic marketing deal outlined in a memorandum of understanding, Vitol said that for the next five years it will get a right of first refusal on all volumes of renewable gas supplied from future Waga projects as they come online. It said 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.

Vitol, the world's biggest independent crude trader, also said it intended to acquire a minority stake in the French company in its initial public offering on the Paris Euronext exchange.

Founded in 2015 by engineers from France's Air Liquide, Waga Energy owns technology to recover landfill gas into biomethane. Also referred to as renewable natural gas (RNG), biomethane is a substitute for fossil-based natural gas and can be directly injected into the grid or used for transportation.

"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 trading house said in a statement, adding that it expects demand for RNG to increase as Europe pushes ahead with its clean energy package to cut its carbon footprint.

Waga has an economically viable solution to capturing landfill emissions, treating the biomethane and injecting it into the grid, Vitol said.

Like most of its independent commodity trading peers, 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. The trader has previously invested in a US project to produce biogas from organic waste.

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