Engie inks sector-first biomethane supply deal with PepsiCo UK

Jan 21 (Reuters) - Engie ENGIE.PA has won a 10‑year deal to supply biomethane for PepsiCo UK, the French utility said on Wednesday, marking the first such deal between a biomethane producer and a food industry player in Britain.

PepsiCo UK will buy 60 gigawatt hours of biomethane a year from Engie's newly-built anaerobic digestion plant in Northern England, the utility firm said.

The facility is expected to start up in the second half of 2027 and will supply renewable gas equivalent to the annual consumption of about 5,000 households, it added.

The investment for the project is valued at 70 million pounds ($94 million), according to Britain's Department for Energy Security.

"What is new in this BPA (biomethane purchase agreement) is that it is directly associated with the construction of a biomethane plant, and it's a model that we would like to replicate in England and other countries," Pierre Chambon, Engie's director of renewable gases in Europe, told journalists on a call.

The company is targeting industrial clients that want to decarbonize their supply of molecules but have trouble going completely electric, Chambon said.

"That could include companies in the agri-food sector like Pepsi, but also industrial companies like glass, cement and steel producers," he added.

Engie operates about 1.2 terawatt hours of biomethane capacity across Europe and is targeting 10 TWh of annual production and 30 TWh of green gas supplied to customers by 2030.

($1 = 0.7444 pounds)