Baker Botts has added Washington, DC-based partner Matthew Gurch, who joins from Stoel Rives.
March 4, 2024
Baker Botts L.L.P. has added Matthew Gurch to the Energy, Projects & Transactions Section of the Global Projects Department as a partner in the Washington, D.C. office.
Gurch’s practice focuses on advising sponsors and private lenders and multilateral development banks in domestic and international energy and infrastructure project development and financings. His broad-based experience includes tax equity structuring and back leverage debt financings for renewable and energy transition assets, and the development and financing of nuclear and other thermal power generation and oil and gas projects.
“Matt is a highly experienced project development and finance attorney and another key strategic lateral partner hire for the firm,” said Danny David, Managing Partner of Baker Botts. “His experience advising clients with respect to complex domestic and international energy and infrastructure projects will be a great complement to our outstanding offerings in those areas. We are excited to welcome him to the firm.”
He joins the firm from Stoel Rives, where he was a partner in the Corporate practice group and a member of the Energy and Natural Resources Industry Groups.
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The global producer and distributor of nitrogen expects a benefit of roughly $119m per year from the recently established 45Q tax incentive for carbon capture and sequestration.
Holland-based OCI N.V. is on track to break ground on a 1.1 million tons per year (MTPA) blue ammonia facility next month.
The global producer and distributor of nitrogen products expects to use the recently established 45Q tax incentive for carbon capture and sequestration at the facility, which will amount to a benefit of roughly $119m per year “that we can utilize to offset taxes or sell to third parties,” CEO Ahmed El-Hoshy said on the company’s 3Q22 earnings call.
In addition to the tax incentives, the project benefits from access to US Gulf Coast natural gas, he added.
El-Hoshy said the plant will be the first world-scale low-carbon ammonia project to commission when it comes online in 2025.
It will require $450m of capex in 2023 and “sub $1bn” in total, and will utilize existing infrastructure at the Beaumont site to export ammonia to the US Midwest fertilizer market as well as the US Gulf Coast’s growing clean ammonia market, El-Hoshy said.
Key infrastructure at the site has been designed to allow for a doubling of capacity to 2.2 MTPA in the future.
The facility will also have strategic supply advantages for the European Union via the company’s Rotterdam terminal, where throughput capacity is expected to triple to 1.2 MTPA by 2023.
A start-up that aims to turn greenhouse gas emissions into carbon materials for sustainable and inexpensive everyday essentials has raised $6m.
Carbonova Corp., a start-up that aims to turn greenhouse gas emissions into carbon materials for sustainable and inexpensive everyday essentials, announced today that it has successfully closed its SAFE equity financing in an oversubscribed round with $6m raised, according to a news release.
The company intends to use the net proceeds from the financing to advance its strategy towards building the first commercial demonstration carbon nanofibers unit in Canada.
The financing round was led by Kolon Industries, a multi-billion-dollar Korean conglomerate. Kolon has a keen interest in Carbonova’s technology applications in Asia, including batteries, plastics, and other materials. Another major participant in this round was the Natural Gas Innovation Fund NGIF Capital, a venture capital firm focused on innovative technologies for improving the environmental performance of existing or renewable natural gas and hydrogen production. This round also saw strong participation from the company’s directors, management, and staff team. This funding adds to the previously announced $2.5 million from Sustainable Development Technology Canada “SDTC” and the National Research Council of Canada Industrial Research Assistance Program “NRC-IRAP” secured in February of 2023.
“Carbonova’s vision is to create everyday essentials from everyday emissions for everyone on earth, and with this financing, we are on track to complete the design of our first-of-a-kind commercial demo unit to put our vision into action,” said Mina Zarabian, Carbonova’s CEO and Co-Founder. “We have investors and customers from the wide spectrum of the carbon value chain validating the strong pull from the market for transitioning to this recycling of carbon to enhance the building blocks of virtually everything in modern society”.
Carbonova currently produces carbon nanomaterials for customers at a pilot facility at the company’s headquarters in northeast Calgary, Alberta. The commercial demonstration expansion will result in unit production cost efficiencies and is forecast to reduce the CO2 footprint of the carbon nanomaterials to below net-zero.
“Carbonova is on track to complete the front-end-engineering design (FEED) of its first commercial demo unit; the new design will represent a significant scale-up from Carbonova’s existing pilot facility,” said Zarabian. “The new plant will generate multiple hundreds of kilograms of carbon nanomaterials per day. This amount is sufficient to generate thousands of tons of sustainable end products and serve dozens of customers to bring their own innovative sustainable products in different sectors to the market.”
Key operating metrics include the efficiency and rate of hydrogen production, plant availability, the ability to respond to intermittent power, and hydrogen purity levels.
Fitch Ratings has set out specific credit-risk considerations relevant to green hydrogen projects in a new report.
Fitch considers the credit risks of such projects to have the closest parallels to those of thermal power assets, and to generally be at least equal to – but potentially greater than – thermal power risks. Future technology and process developments will be evaluated and incorporated in ratings as the industry matures.
Whilst there are two key proven electrolyser technologies for producing hydrogen from renewable energy and water, the green hydrogen market is still nascent, meaning that precedents for project-financed transactions are very limited.
Green hydrogen projects have a greater range of balance of plant than solar, wind or thermal power projects. Complexity, and consequently integration risk, will therefore have a key influence on the completion risk assessment in any rating.
The availability of alternative replacement contractors to complete a project will be key for whether it can be rated above the incumbent contractor.The immaturity of the market will heighten the weight given to independent experts’ (IE) views in relation to such replaceability. We also generally expect high dependence on project parties, such as original equipment manufacturers, who will be key in O&M activities due to their expertise and equipment warranties.
The limited number of peer green hydrogen projects also means Fitch will be more reliant on the IE’s views of the reasonableness of a project’s budgeted or contracted operating costs. Any perceived lack of credibility, competence and experience of the project parties could be factored into the financial profile assessed in our ratings.
Key operating metrics include the efficiency, and rate, of hydrogen production, the plant availability, the ability to respond to intermittent power, and, where this is critical, the hydrogen purity levels.
A New Jersey-based start-up is seeking to commercialize an electrocatalytic technology that transforms CO2 into a monomer for the plastics industry.
RenewCO2 is developing and seeking to commercialize a modular technology that converts waste CO2 into a usable product.
The New Jersey-based company is advancing a pilot project at an Ace Ethanol plant in Wisconsin that will take CO2 and convert it to monoethylene glycol, which can be used by the plastics industry.
The project was recently selected by the US DOE to receive a $500,000 grant. It seeks to demonstrate the technology’s ability to reduce the ethanol plant’s carbon footprint and produce a carbon-negative chemical.
In an interview, RenewCO2 co-founders Anders Laursen and Karin Calvinho said their technology, which was developed at Rutgers University, is geared toward carbon emitters who can not easily pipe away their CO2 and who may have use for the resulting product.
“It’s a matter of economics,” said Calvinho, who serves as the company’s CTO. Using the RenewCO2 technology, the ethanol plant or other user is able to keep 45Q tax incentives for capturing CO2 while also creating a product that generates an additional revenue stream.
Additionally, the modular design of the technology prevents emitters from having to build expensive pipeline infrastructure for CO2, she added. “We want to help to facilitate the use of the CO2 on site,” she said.
One of the goals of the project is to measure the carbon intensity of these technologies in combination, which ultimately depends on the electricity source for the electrochemical process, similar to an electrolyzer, Laursen, who is the CEO, said.
“The main constraint from a location point of view is the availability of reliable and affordable green power,” Laursen added.
Creating a market
The principal target market for RenewCO2’s technology is existing producers of monoethylene glycol (MEG), which is used to make recycled plastics, as well as ethanol producers and other emitters with purified CO2 streams.
Producers of polyethylene terephthalate (PET) – one of the most recycled plastics globally – are also potential customers since they use MEG in their production process and have CO2 sources on site.
“Right now, MEG produced in the US is, for the most part, not polymerized into PET – it’s shipped overseas for making PET plastics used in textiles, and then made into fibers or shipped further,” Laursen said. “So if you can shorten that transport chain, you can reduce the CO2 emissions associated with the final product.”
RenewCO2 is looking for partners to help build the modular units, and is evaluating the purchase of existing PEM electrolyzer units that can be reconfigured, or having the units custom manufactured.
“We’re talking to potential manufacturing partners and evaluating whether we should do the manufacturing ourselves,” Calvinho said. And if they choose the latter route, she added, “we will have to build our own facilities, but it’s early to say.”
The company has raised a total of $10m in venture investment and grant funding, including a pre-seed round of over $2m from Energy Transition Ventures, a Houston-based venture capital fund.
While not currently fundraising, Laursen said they are always taking calls to get to know the investors that are interested in the space. He added that the company may need to raise additional capital in 12 to 18 months.
A western US company producing RNG by injecting biomass into coal seams is preparing a Series B and has a line of site to financing and contracting EPC for a series of projects in western coal fields.
Cowboy Clean Fuels, a Wyoming-based RNG producer, is preparing to launch a Series B to reach commercialization, CEO Ryan Waddington told ReSource.
CCF injects biomass feedstock like molasses into the coal seams of spent coal mines about 1,000 ft. below surface, relying on the endogenous microorganisms living in those seams to produce methane, Waddington said. Capex on projects is low, up to $6m each.
The company raised $10m in a Series A and will seek to raise that same amount for a Series B. The company has been assisted by Syren Capital Advisors.
Projects are set up as separate entities under the parent, Waddington said. Six projects, each ranging from 70 to 300 wells, are in the company’s pipeline now in the Powder River Basin of Wyoming and Montana.
“We can replicate this 1,000 times,” Waddington said of the immense number of available wells in the region, which can be acquired cheaply. Additional growth could come in the San Juan region of New Mexico, where coal capacity is being retired quickly.
The fuels could be sold as renewable diesel into markets with incentives, like California’s LCFS, Waddington said. The renewable fuel is significantly (10X) more expensive than natural gas produced as a by-product of oil production. But, CCF is not looking to participate in the LCFS program or the EPA-run RFS program.
“The voluntary market for RNG has really taken off,” he said. A contract for renewable diesel offtake is pending with a Wyoming-based oil and gas company looking to lower its CI score.
CCF’s projects are much larger than a typical RNG project, Waddington said; the first project will produce at some 700 cfpy and include 185 tons of CCS. CCF is looking for EPC providers now.
The executive team of CCF has a minority position of the company, Waddington said. The founders and the management team together have a majority position.
The company’s first 139-well project in Wyoming is awaiting final approval from the federal Bureau of Land Management.
CCF is primarily VC-backed to date. The company received approximately $7.8m through the Energy Matching Funds program of theWyoming Energy Authority early this year.
The company is well capitalized following a $250m equity investment from Generate Capital and is now opportunistically reviewing an initial slate of project M&A offerings.
Following an equity investment from Generate Capital, Ambient Fuels has begun to evaluate potential acquisitions of hydrogen projects that are under development, CEO Jacob Susman said in an interview.
“We’ve seen our first project M&A opportunities come through in the last 10 days or so,” Susman said.
Three projects for sale involve land positions, he said. Those that appear most attractive have a clear line of site to offtake or a strong approach to renewable power supply. Two out of three are not on the Gulf Coast.
“In no instance are these brokered deals,” Susman said.
Following the $250m equity investment from Generate Capital, Ambient is capitalized for several years and has no immediate plans to seek debt or tax equity, Susman said. The transaction was done without the help of a financial advisor.
Moving forward Ambient is open to JV formation with a partner that can help access offtake and renewable power, Susman said. Those points will drive future capital investment in the company and were resources that Generate brought to the table besides money.
