UK-based energy giant and LNG player BP agreed on Wednesday to buy Clean Energy Fuels Corp’s biomethane production facilities in the U.S. for $155 million.
BP will take over Clean Energy’s existing and two new biomethane production sites as well existing third party supply contracts for renewable natural gas.
As part of the deal, the U.S. provider of LNG and CNG, Clean energy has also signed a long-term contract to buy purchase biomethane from BP.
“The deal enables both companies to accelerate the growth in renewable natural gas supply and meet the growing demand of the natural gas vehicle fuel market,” the two companies said in a joint statement.
Renewable natural gas fuel, or biomethane, is produced entirely from organic waste.
As a fuel for natural gas vehicle fleets, including heavy-duty trucks, it is estimated to result in 70 percent lower greenhouse gas emissions than from equivalent gasoline or diesel fueled vehicles, according to the statement.
“Demand for renewable natural gas is growing quickly and BP is pleased to expand our supply capability in this area,” said Alan Haywood , chief executive officer of BP’s supply and trading business.
“BP is committed to supporting developments towards a lower carbon future and, working with Clean Energy, we believe we will be well-positioned to participate in the growth of this lower carbon fuel in the U.S.,” he added.