Archaea Energy, Aria Energy partner on RNG

Archaea Energy LLC , an emerging leader in the development and advancement of renewable natural gas (RNG), announced on April 7 an agreement to enter into a business combination with Aria Energy LLC led by Rice Acquisition Corporation, a special purpose acquisition company focused on the energy transition sector. The business combination with Archaea and Aria, one of the largest companies in the North American landfill gas (LFG) sector, will create the leading U.S. RNG platform. The combined company, which will 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 carbon dioxide,” said Nicholas Stork, Archaea co-founder and CEO. “We are on a trajectory to become a leading RNG platform in North America, serving our decarbonization 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.”

RNG is a green bridge to sustainability and long-term decarbonization that enables organizations to greenify their existing natural gas infrastructure. It is the most sustainable solution for capturing carbon emissions generated by food waste, wastewater, agriculture waste and landfill gas. RNG is becoming part of the North American and worldwide clean energy supply chain as an increasing number of entities look to secure a green energy future.

Approximately 60-70 percent of the combined company’s RNG volumes will be contracted under fixed-price off-take arrangements 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.

“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,” said Brian McCarthy, Archaea Energy co-founder and CEO. “The already demonstrated institutional investor confidence in our vision for Archaea Energy will also enable us to deliver a low-risk development program with two-thirds of our RNG production under long-term, fixed-price arrangements with investment-grade buyers.”

Archaea is led by an entrepreneurial team of new generation landfill owners and RNG technologists. To continue to lower the carbon intensity of its RNG, Archaea is developing CO₂ sequestration and green hydrogen projects using its RNG as a feedstock resulting in negative CI scores.

RAC’s heavily oversubscribed PIPE obtained $300 million in commitments led by institutional investors including The Baupost Group, BNP Paribas Energy Transition Fund, CIBC, Goldman Sachs Asset Management LP¹, and Wellington Management as well as anchor orders from the Rice family, Saltonstall family, and Archaea management. The anticipated valuation of the business combination of RAC, Archaea and Aria is $1.15 billion at close, which is expected in the third quarter of 2021. Archaea Energy’s new executive team will be comprised of leaders from Aria and Archaea and the combined company plans to remain listed on the NYSE under the ticker symbol “LFG”. Pillsbury Winthrop Shaw Pittman LLP is the legal counsel to Archaea.