BP has announced that it has agreed to acquire Archaea Energy Inc., a leading producer of renewable natural gas (RNG) in the US.

Based in Houston, Texas, Archaea Energy has a development pipeline of more than 80 projects that underpin the potential for around five-fold growth in RNG production by 2030. Through this transaction BP expects to expand presence in the US biogas industry, enhancing its ability to support customers’ decarbonization goals and also progressing its aim to reduce the average carbon intensity of the energy products it sells.

The transaction will be valued for US$3.3 billion in cash, as well as around US$800 million of net debt. The acquisition is subject to regulatory and Archaea shareholder approval. Morgan Stanley & Co. LLC is acting as financial adviser to bp and Freshfields Bruckhaus Deringer as lead legal adviser to BP.