Shell invests in used lubricants firm and buys Europe’s biggest biogas producer

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SHELL has acquired a 49% interest in Blue Tide Environmental, a company specialising in the production of high-lubricity, low-sulphur marine fuel derived from recycled used motor oil. Owned by Tailwater Capital, Blue Tide said it is working towards producing 5,000 barrels per day at its plant in Baytown, Texas when the facility becomes fully operational in 2024. 

It is estimated that the US generates more than 6bn l/y of waste motor oil — some of that is illegally dumped, and some ends up burned as an industrial fuel source. But oil never wears out, it just gets dirty and by re-refining used oil (making it clean again) in a cyclical fashion, pollution in soil and water and the harmful emissions that are released when burned, can be avoided time and time again. 

“We share Shell’s optimism and vision for Blue Tide as the recycled lubricants space evolves and demand for Group II+ base oils continues to grow,” said Edward Herring, Managing Partner at Tailwater. “We look forward to continuing to support the entire Blue Tide team as they bring the state-of-the-art facility online and grow the business while promoting the circular economy.” 

Shell buys RNG leader 

News of the acquisition has come just days after the energy giant also revealed it has reached an agreement to buy Nature Energy Biogas, the largest producer of renewable natural gas (RNG) in Europe, as the company pushes to be a net-zero emissions energy business by 2050.  

The biogas deal, worth nearly US$2bn, is expected to close in the first quarter of next year subject to regulatory approvals. Shell said the deal would support the company’s ambition to profitably grow its low carbon fuels production. 

RNG, also known as biomethane, is chemically identical to conventional natural gas and is produced from biochemical processes, such as anaerobic digestion, and gasification. With minor processing, biogas can be used as a replacement for traditional natural gas to generate combined electricity and heating for power plants. 

Nature Energy currently has 14 plants in operation which has boosted its biomethane production to approximately 180m m3/y. A further 30 plants across Europe and North America are also planned with many already in the medium to late development stage. 

Shell’s announcement follows a string of similar acquisitions from other energy giants looking to push investments into renewable fuels. Earlier this year Chevron bought the outstanding shares of the Iowa-based biodiesel production company Renewable Energy Group (REG) for US$3.15bn in cash, and in October, BP agreed to buy biogas producer Archaea Energy. BP said the acquisition, of Houston-based Archaea, which cost the firm $4.1 billion, is its biggest deal since it took over BHP Shale Assets for US$10.5bn in 2018. 

“Acquiring Nature Energy will add a European production platform and growth pipeline to Shell’s existing RNG projects in the United States,” said Huibert Vigeveno, Shell’s Downstream Director. “We will use this acquisition to build an integrated RNG value chain at global scale, at a time when energy transition policies and customer preferences are signalling strong growth in demand in the years ahead.”