London-listed SPAC New Energy One in talks about Eni North Sea merger

A London-listed vehicle advised by Amber Rudd, the former home secretary, is in talks to merge with a portfolio of carbon capture and storage (CCS) projects part-owned by Eni, the Italian energy giant.

Sky News has learnt that New Energy One Acquisition Corporation (NEOA) is in advanced discussions about a combination with the Bacton and HyNet projects, which together will be capable of storing 20m tonnes of carbon annually by 2030.

The ventures are seen as forming an important contributor to the objective of meeting UK net zero emissions targets in the coming years.

A formal deal remains some way off, and key details, including a precise valuation and the composition of the assets to be included in the merger, have yet to emerge.

However, one energy sector banker said on Thursday that if completed, the combination would result in the public listing in London of one of the most significant energy transition-focused companies to date.

A source said the value of the deal could be in the region of £1bn, although that figure could not be verified on Thursday.

Eni is one of the principal sponsors of NEOA, making the merger with assets it partly owns and manages strategically rational.

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Spokespeople for New Energy One and ENI both declined to comment.

News of the talks comes as ENI is also reported to be in the final stages of concluding a $5bn deal to acquire Neptune Energy Group, which was founded by former Centrica chief Sam Laidlaw.

Neptune has significant interests in the North Sea, with a deal potentially being announced this week, according to Bloomberg News.

ENI is on course to become the biggest carbon storage provider in the UK.

The 20m tonnes-a-year capacity of the Bacton and HyNet projects would equate to two-thirds of the government’s 30m tonnes target.

People close to ENI say the company has identified the UK as one of the best locations in the world to invest in carbon capture and storage (CCS).

The company has had a presence in the UK for over 40 years.

HyNet is located in the Liverpool Bay area, while the Bacton Thames Net Zero Cooperation Agreement, convened by Eni, is focused on decarbonising industrial processes in south-east England.

NEOA announced last month that it had agreed an extension of its deadline to agree a business combination to March 2024.

The company is chaired by Volker Beckers, the former boss of npower, while Ms Rudd acts as a strategic adviser.

“NEOA has engaged with a select number of opportunities about a potential business combination in the energy transition sector and, in particular, across the [carbon capture, utilisation and storage] value chain,” it told the stock market.

It added that its ambition was “to create amongst the first pure-play publicly listed CCUS companies, and a business operating across the CCUS value chain, incorporating carbon management, capture, utilisation, transportation and storage”.

“NEOA has signed a non-binding letter of intent in respect of one such CCUS opportunity.”

It did not publicly identify the assets with which it was in talks.

The vehicle was one of a rare breed of London-listed special purpose acquisition companies (SPACs) which aimed to take advantage of a relaxation of listing rules by City regulators.

The dire performance of many US-listed SPACs, however, reduced the pace of such listings to a trickle, with many having since been dissolved.

A number of companies which did go public through SPAC mergers, such as Virgin Orbit, have collapsed into insolvency.

This week, Sky News revealed that another London-listed SPAC, Financials Acquisition Corporation, was in discussions about creating a public company giving investors direct access to the Lloyd’s of London insurance market.

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