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Can Eni's (E) FRI-EL Biogas Acquisition be a Game Changer?

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Zacks Equity Research
·3 min read
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Eni S.p.A. E recently agreed to acquire FRI-EL Biogas Holding to boost its carbon footprint reduction efforts. Ecofuel, a subsidiary of Eni and FRI-EL Greenpower, an electricity producer from renewables, struck the deal.

The acquiree has 21 biogas-to-electricity plants along with an OFMSW processing facility that processes organic fraction of municipal solid waste. Eni is planning to convert the plants to produce biomethane. Once the process concludes, the facilities are expected to supply more than 50 million cubic meters of biomethane per annum to the network.

Financial details of the deal, which can make Eni a major biomethane producer in Italy, are yet to be disclosed. The move is expected to boost the energy major’s growth in the circular economy, a regenerative concept that focuses on utilizing waste to create final products for consumption. The acquisition of FRI-EL Biogas Holding will be a noteworthy milestone in Eni’s strong focus on a greener future, abiding by the Paris Agreement. The integrated energy player is on track with the plan of full decarbonization of products and processes by 2050.

Notably, the company is expected to install a total of 4 gigawatts of wind and solar energy across the globe by 2024. Moreover, its power generation capacity will likely rise to 15 GW by 2030 and 60 GW by 2050. Markedly, it created a new joint venture, GreenIT, with CDP Equity, where €800 million will be invested over five years in renewables. In fact, the firm is well-positioned to capitalize on the gigantic demand for cleaner energy.

Price Performance

Eni’s shares have surged 51.1% in the past six months compared with a 50.8% rise for the industry.

Zacks Rank and Other Stocks to Consider

Currently, the stock sports a Zacks Rank #1 (Strong Buy).

Other top-ranked players in the energy space include DCP Midstream, LP DCP, Frank's International N.V. FI and Royal Dutch Shell plc RDS.A, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DCP Midstream’s bottom line for 2021 is expected to jump 45.3% year over year.

Frank's International’s bottom line for 2021 is expected to rise 46.7% year over year.

Shell’s bottom line for 2021 is expected to increase 188.7% year over year.

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Eni SpA (E) : Free Stock Analysis Report

Royal Dutch Shell PLC (RDS.A) : Free Stock Analysis Report

Franks International N.V. (FI) : Free Stock Analysis Report

DCP Midstream Partners, LP (DCP) : Free Stock Analysis Report

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Zacks Investment Research