Commercial due diligence for an investor into a BioLNG business in the Nordics
M&A Transactions – Gas & LNG
The Engagement:
Commercial Advisory & Due Diligence
Conducting a commercial due diligence on a BioLNG production business (10 plants) in the Nordics
The Client:
Leading infrastructure investor
The Challenge:
Assess the commercial viability of a BioLNG production developer with a particular focus on the monetisation options for the production
Duration:
Ongoing (2023-)
Transaction summary
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Commercial Due Diligence
- Assessment of the feasibility of the vendors business model including key assumptions on revenue drivers for BioLNG and biogenic CO2 pricing such as CI score
- Provided market and pricing netback outlooks for key BioLNG markets and sectors including marine, transportation and industrial sectors in northwest Europe and the Nordics
- Assessment of regulatory drivers for BioLNG
Market Engagement
- Given the infancy of term BioLNG sales, Energex engaged with a wide variety of market participants to test demand and discuss possible sales structures
- Energex engaged with traders, IOC’s, maritime players and industrial customers to test vendor assumptions and ultimately provide an independent revenue forecast for the client
Outcome
- Energex were able to test key assumptions in what is a relatively opaque market through leveraging relationships in the industry rather than relying on ‘desktop’ studies
- Our commercial due diligence provided sufficient confidence to our client to progress to the final stages of the transaction
- As a result of our market engagement, we were able to provide our client and the vendor management team with a shortlist of interested offtakers for the BioLNG volumes