(Reuters) – Shares of Archaea Energy jumped as much as 9.2% on the largest U.S. renewable natural gas producer\u2019s debut on the New York Stock Exchange on Thursday, a sign of rising investor support for alternative, cleaner sources of energy.<\/p>\n
Archaea, which went public by merging with the blank-check firm Rice Acquisition Corp in a $1.15 billion deal, closed at $19.95 on Thursday, up from the $18.27 price the SPAC\u2019s shares traded at on Wednesday.<\/p>\n
Renewable natural gas (RNG), produced from animal farms and landfills, has seen a massive surge in demand this year as climate conscious investors push for cleaner energy sources.<\/p>\n
Due to the demand, RNG sells at a premium to natural gas and numerous companies like oil major Chevron Corp and power provider NextEra Energy have announced projects focusing on this renewable gas.<\/p>\n
Archaea is exploring partnerships with waste industry participants, like landfill owners, and with traditional oil and gas companies, Chief Executive Officer Nick Stork told Reuters in an interview.<\/p>\n
\u201cWe\u2019re also exploring partnerships with natural gas utilities in the U.S. and abroad, and I think generally what you\u2019re hearing or seeing is that our counterparties want to be part of the solution,\u201d Stork said.<\/p>\n
The company has laid out targets to keep 70% of its production locked in so-called \u2018long-term fixed pay\u2019 contracts that are safe from fluctuations in the spot markets, though the target level is just to keep the company\u2019s options open.<\/p>\n
\u201cWe could put all of our volumes (in long-term contracts) today. We\u2019ve got enough demand… It\u2019s a matter of us wanting to retain a certain level of optionality around a percentage of our volumes,\u201d said Eric Javidi, Archaea\u2019s Chief Financial Officer.<\/p>\n