Archaea Energy has agreed to join forces with Aria Energy, led by Rice Acquisition Corporation (RAC), to create the ‘leading’ US renewable natural gas (RNG) platform.
The new combined company, to be called Archaea Energy, will be dedicated to reducing carbon emissions through landfill gas conversion, CO2 sequestration, and green hydrogen.
“Archaea was founded to create green energy from methane produced through anaerobic digestion, a greenhouse gas 25 times more harmful than CO2,” said Nicholas Stork, Archaea co-founder and CEO.
“We are on a trajectory to become a leading RNG platform in North America, serving our decarbonisation partners under long-term supply agreements. Our mission is to reduce the carbon intensity (CI) of vented and flared methane and empower corporations, universities, municipalities, and utilities to meet their sustainability goals.”
Sixty to 70% of the new combined company’s RNG volumes will be contracted under fixed-price off-take agreements with investment-grade customers to limit earnings volatility. Archaea currently has a higher indicated demand through its existing partnerships than the entire RNG production in the market today.
Brian McCarthy, Archaea Energy co-founder and CEO, commented: “Archaea’s expanding customer base, the growing demand for RNG, and our team’s experience and ability to produce and deliver pipeline-quality RNG through the existing natural gas infrastructure will drive our growth.
“The already demonstrated institutional investor confidence in our vision for Archaea Energy will also enable us to deliver a low-risk development programme with two-thirds of our RNG production under long-term fixed-price arrangements with investment-grade buyers.”
Archaea is led by a team of new generation landfill owners and RNG technologists. To continue to lower the CI of its RNG, Archaea is developing CO2 sequestration and green hydrogen projects using its RNG as a feedstock, resulting in negative CI scores.
The anticipated valuation of the business combination of RAC, Archaea, and Aria, is $1.15 billion (€968 million) at close, which is expected in the third quarter of this year. Archaea Energy’s new executive team will be comprised of leaders from Aria and Archaea.