Gunvor invests in US-based RNG producer OPAL Fuels

Geneva-based commodities trader Gunvor Group said December 17 it would make an equity investment supporting the combination of renewable natural gas (RNG) producer OPAL Fuels and acquisition company ArcLight.

Gunvor said it would make an investment through its Nyera segment that was set up to support progressive developments in the energy transition. The investment would be in the form of a so-called PIPE, a private investment in public equity.

PIPEs are public share purchases at below market value.

OPAL Fuels said December 1 it would combine with acquisition firm ArcLight and turn into a publicly-listed company on the Nasdaq stock exchange.

OPAL operates 21 biomethane projects and expects to generate $170mn in revenues this year. The agreement with ArcLight has an implied value of $1.75bn and OPAL will trade under the ticker symbol OPL once the transaction closes in the second quarter of 2022.

Earlier, OPAL said it had formed a joint venture with GFL Renewables to develop two new US production facilities.

“RNG is a proven low-cost, low-carbon fuel that, when used in transportation, can reduce fuel costs by 40-70%/gallon when compared to diesel fuel,” Gunvor said. “These significant fuel cost savings to fleet operators are generated while dramatically reducing the total carbon footprint of heavy-duty fleets.”

Earlier this week, Gunvor said it secured a $1.135bn syndicated borrowing base facility to expand its LNG operations globally.

The syndication was launched at $800mn but was oversubscribed by investors mostly in Asia, the Middle East and Europe, and closed at $1.135bn. The funds will be used to finance physical and derivative positions, Gunvor said.

The Swiss trader, which is targeting a 40% cut in its Scope 1 and 2 emissions by 2025, said the facility included a commitment on reducing both these emissions and Scope 3 ones.