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Advisor Profile: Cameron Lynch of Energy & Industrial Advisory Partners

The veteran engineer and financial advisor sees widespread opportunity for capital deployment into early-stage renewable fuel companies.

Cameron Lynch, co-founder and managing partner at Energy & Industrial Advisory Partners, sees prodigious opportunity to pick up mandates in the hydrogen sector as young companies and early movers attract well-capitalized investors looking for auspicious valuations.

The firm, a three-year-old boutique investment banking outfit with offices in New York and Houston, is broadly committed to the energy transition, but is recruiting for new personnel with hydrogen expertise, Lynch said, adding that he is preparing for a new level of dealmaking in the new year.

“I think we can all expect 2023 will be even more of a record year, just given the appetite for hydrogen,” Lynch said. “Hydrogen is one of our core focuses for next year.”

Cameron Lynch

Lynch started his career as a civil & structural engineer and moved into capital equipment manufacturing and leasing for oil & gas, and also industrial gasses –things like cryoge

nic handling equipment for liquid nitrogen. He started the London office of an Aberdeen, U.K.-based M&A firm, before repeating that effort in New York.

Founding EIAP, Lynch and his business partner Sean Shafer have turned toward the energy transition and away from conventional energy. The firm works on the whole of decarbonization but has found the most success in the hydrogen space.

Earlier lifecycle, better valuations

Hydrogen intersects with oil& gas, nuclear, chemicals, midstream companies, and major manufacturing.

Large private equity funds that want to get into the space are realizing that if they don’t want to pay “ridiculous valuations for hydrogen companies” they must take on earlier-stage risk, Lynch said.

Interest from big private equity is therefore comparatively high for early-stage capital raising in the hydrogen sector, Lynch said, particularly where funds have the option to deploy more capital in the future, Lynch said.

“They’re willing to take that step down to what would normally be below their investment threshold.”

Lynch, who expects to launch several transactions in the coming months with EIAP, has a strong background in oil & gas, and views hydrogen valuations as a compelling opportunity now.

“It’s very refreshing to be working on stuff that’s attracting these superb valuations,” Lynch said.

There’s a lot of non-dilutive money in the market and the Inflation Reduction Act has been a major boon to investors, Lynch said. For small companies, getting a slice of the pie is potentially life changing.

Sean Shafer

The hydrogen space is not immune to the macroeconomic challenges that renewables have faced in recent months and years, Lynch said. But as those same challenges have accelerated the move toward energy security, hydrogen stands to benefit.

Supply chain issues post-COVID pose a potential long-term concern in the industry, and equity and debt providers question the availability of compressors and lead times.

“I would say that’s one of the key issues out there,” Lynch said. There’s also the question of available infrastructure and the extent to which new infrastructure will be built out for hydrogen.

EIAP sees the most convincing uses for hydrogen near term in light-weight mobility and aerospace, Lynch said. The molecule also has a strong use case in back-up generation.

Hydrogen additionally presents companies in traditional fossil fuel verticals the opportunity to modernize, Lynch said, citing a secondary trade EIAP completed earlier this year

California’s Suburban Propane Partners acquired a roughly 25% equity stake in Ashburn, Virginia-based Independence Hydrogen, Inc. The deal involved the creation of a new subsidiary, Suburban Renewable Energy, as part of its long-term strategic goal of building out a renewable energy platform.

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Vinson & Elkins adds tax partner from Shearman

V&E has added a California-based tax equity and energy transition partner from Shearman & Sterling.

Vinson & Elkins has added Jorge Medina as a partner in its tax practice.

California-based Medina is a practitioner in tax equity and other transactions across the energy transition, the firm said in a news release. He represents many of the top sponsors and tax equity investors in solar, wind, energy storage, hydrogen, renewable natural gas, carbon capture, geothermal, biofuels and electric vehicle transactions.

Medina joins from Shearman & Sterling, where he was a partner in the firm’s Project Development & Finance Practices and Head of Renewables (Americas). He previously served as associate general counsel-tax at Tesla Inc. and, prior to that, as vice president and deputy general counsel at SolarCity, which was acquired by Tesla.

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CO2-to-SAF developer gets $75m project equity investment

The developer also entered into an offtake agreement with American Airlines, with financial support from Citi.

Infinium and Breakthrough Energy Catalyst today announced a $75m project equity investment commitment to support Infinium’s Project Roadrunner, subject to the satisfaction of certain closing conditions, according to a news release.

Project Roadrunner will convert waste carbon dioxide (CO2) and renewable power into sustainable aviation fuel (SAF) and other low-carbon fuels. This first-of-a-kind commercial-scale Power-to-Liquids (PtL) eFuels facility is expected to be the largest PtL eFuels project in North America once operational. Breakthrough Energy Catalyst funds and invests in first-of-a-kind projects that support the deployment of emerging climate technologies to reduce emissions and accelerate the clean energy transition. This commitment represents Catalyst’s first equity investment to date.

Project Roadrunner, located in West Texas, will convert an existing brownfield gas-to-liquids project into a fully integrated eFuels facility that will deliver products into both U.S. and international markets. It will primarily produce Infinium eSAF, a sustainable aviation fuel with the potential to significantly reduce the lifecycle greenhouse gas emissions (GHG) associated with air travel. PtL SAF is expected to reduce lifecycle GHG emissions in aviation by around 90 percent, which is higher than the emissions reductions achieved using SAF on the market today. Project Roadrunner will also produce Infinium eNaphtha for use in plastics manufacturing and Infinium eDiesel for use in hard-to-electrify transportation methods, such as long-haul trucking and maritime applications.

In tandem with Catalyst’s investment in Infinium, American Airlines and Infinium have entered into an innovative, firm offtake agreement for Infinium eSAF, according to the release. This agreement is a critical enabler of further investment in Project Roadrunner. American joined Breakthrough Energy Catalyst as an anchor partner to accelerate the development of next-generation clean energy technologies, including SAF. The Catalyst team worked to develop the agreement alongside the American and Infinium teams. The agreement provides one model for how airlines can use offtake agreements to help promising new SAF technologies attract investment dollars.

In further support of this offtake agreement, Citi and American Airlines have separately agreed to transfer the associated emission reductions to Citi to support the scaling of this innovative technology and help reduce a portion of Citi’s Scope 3 emissions from employee travel. Citi is also a partner of Breakthrough Energy Catalyst.

Infinium has numerous eFuels projects in development across the U.S., Europe, Middle East, Japan and Australia.

“The investment from Catalyst is critical to accelerating the completion of Project Roadrunner and to the delivery of significant volumes of eFuels created from waste carbon dioxide and renewable power. Importantly, this project will serve as a template for other, larger eFuels plants under development,” said Robert Schuetzle, CEO at Infinium. “The groundbreaking commercial agreement with American is an important prototype for the aviation industry as its firm offtake agreement supports project financing, providing revenue certainty for the project.”

“This project is a landmark achievement for the development of sustainable aviation fuels and the offtake agreement provides a model for the entire aviation industry of one way to effect change and support the scale-up of capital-intensive projects,” said Mario Fernandez, Head of Breakthrough Energy Catalyst. “Infinium’s technological and commercial maturity, coupled with the company’s project development expertise, will help accelerate the clean energy transition by quickly bringing to market clean fuels for aviation, trucking, and other long-distance parts of the transportation sector. American’s creativity, commitment and collaboration with Citi, have set a new marker, demonstrating what it takes to usher in a climate-friendly aviation future.”

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Italy’s Eni to invest $835m in Louisiana biorefinery

Eni Sustainable Mobility will invest in a biorefinery being built by PBF Energy in Louisiana.

Eni Sustainable Mobility and PBF Energy Inc. have entered into definitive agreements to partner in a 50-50 joint venture, St. Bernard Renewables LLC (SBR), for the biorefinery currently under construction co-located with PBF’s Chalmette Refinery in Louisiana (US).

Upon consummation of the transaction, which is subject to customary closing conditions, including regulatory approvals, Eni Sustainable Mobility will contribute capital totaling $835m plus up to additional $50m that is subject to the achievement of eventual project milestones and will provide expertise in biorefining operations, supply and marketing.

Citi is serving as financial advisor to PBF Energy.

PBF brings its strong industrial know-how in the United States and, as the contributor of the biorefinery, will continue to manage project execution and serve as the operator once construction is complete. The St. Bernard Renewables biorefinery startup is scheduled in the first half of 2023 and the facility is currently targeted to have processing capacity of about 1.1 million tonnes/year of raw materials, with full pretreatment capabilities. It will produce mainly HVO Diesel (Hydrotreated Vegetable Oil, commonly known as ‘renewable diesel’ in North America), with a production capacity of 306 million gallons per year. The biorefinery will use the Ecofining™ process developed by Eni in cooperation with Honeywell UOP.

This strategic partnership will leverage the experience and expertise of Eni Sustainable Mobility and PBF. Together with Ecofining™ technology, Eni brings its experience in biorefining that led to the world’s first conversion of a refinery into a biorefinery in Porto Marghera (Venice) in 2014, and to the second converted biorefinery that has been working in Gela (Sicily) since 2019. The company also provides its worldwide knowledge in supplying sustainable feedstock sourcing for HVO, mainly based on oily waste and residues, and raw materials that do not compete with the food chain, coupled with access to international markets beyond PBF’s footprint in the United States.

PBF brings experience in large capital project execution and fuels manufacturing as well as access to the California renewables market through its existing logistics assets. The joint venture reflects both partners’ commitment to deliver more sustainable transportation fuels using low carbon intensity feedstocks.

“Joining St. Bernard Renewables biorefinery project enables Eni to enter into US biofuels growing market together with a strong partner such as PBF. This is a further step for Eni Sustainable Mobility to expand its biorefining capacity, that today is over 1 million tonnes/year and it is planned to grow in the upcoming years. Following results achieved in Venice and Gela, Eni Sustainable Mobility is a pioneer in the biorefining industry, and it is also studying possible construction of two new biorefineries in Italy and in Malaysia. We do believe the role of HVO will strongly contribute to decarbonization of road transports, including hard to abate heavy duty sector, as it leverages existing infrastructure and can immediately fuel existing vehicle fleets. Biofuels are part of Eni strategy to achieve carbon neutrality by 2050 through the reduction of the emissions generated during the entire products life cycle”, Stefano Ballista, CEO of Eni Sustainable Mobility, said.

“We’re excited to enter this strategic partnership with Eni Sustainable Mobility, a global leader in biorefining. The SBR biorefinery will benefit greatly from PBF and Eni’s complementary strengths and expertise. The project will utilize existing processing infrastructure and diverse inbound and outbound logistics and is ideally situated to support growing demand for low-carbon fuels,” said PBF President Matthew Lucey. “Our partnership with Eni signals a major milestone for PBF and demonstrates our commitment to contributing diversified sources of energy to the global mix while lowering the carbon intensity of our operations and the products we manufacture.”

SBR will operate as an independent entity with feed procurement and product distribution managed by a dedicated team working on behalf of the St. Bernard Renewables joint venture. While the partnership is set to benefit from its co-location with PBF’s Chalmette refinery through a variety of shared services, the operations and ownership of the Chalmette refinery will not be affected by the formation of the partnership.

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Hydrogen technology firm hires advisor for capital raise

A firm with a technology to produce green hydrogen from sunlight without electrolysis is prepping a capital raise.

BoMax Hydrogen, a Florida-based hydrogen technology firm, is preparing to launch a capital raise later this month, according to two sources familiar with the matter.

Boutique advisory firm Taylor DeJongh has been retained to run the process, the sources said. Teasers will likely go out in two weeks.

BoMax is seeking to raise around $15m in a Series A round, the sources added.

The company touts e a novel technology making hydrogen from visible light without the need for solar electrolysis, according to a pre-teaser marketing document seen by ReSource. An alpha prototype has been awarded by the US Department of Energy.

The technology, which does not require rare earth minerals, produces hydrogen at point of need and has been reviewed by scientists at Utah State University.

To date the company has raised about $5m, one of the sources said. That came mostly from friends and family and one Japanese investor.

Funds from the Series A will be used to make a beta prototype, scale operations at the company’s labs in Orlando and prepare for commercial production.

BoMax and Taylor DeJonghe did not respond to requests for comment.

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Exclusive: Carbon conversion startup planning capital raise

A Halliburton Labs-backed startup is developing a pilot plant in the Pacific Northwestern US, while forming financial relationships for an industrial-scale carbon conversion facility in the same location.

OCOchem, a Washington state-based carbon conversion startup, will seek new capital partners to build its first commercial scale facility in 2026, CEO Todd Brix said in an interview.

Starting in late 2024 or early 2025, the company will likely go to market for new liquidity – including project debt and equity, Brix said. He declined to talk about capex, but said the first commercial plant in Richland, Washington will cost “multiple tens of millions of dollars.”

The company is working with two EPCs now and is represented legally by Miller Nash law firm in the Pacific Northwest, Brix said. The company does not have a formal relationship with an investment bank but will likely form one for a Series A and later rounds.

“We’ve been in touch with a number of private equity and project finance people,” Brix said of early-stage discussions.

OCOchem is considering land options in Richland for its first plant and is organizing to begin permitting, Brix said. There is opportunity to form relationships with industrial partners in need of an offtaker for their CO2 emissions and new incremental revenue streams, as well as customers for chloral hydrates and other formic acid products.

“We expect to build hundreds of these plants all around the planet,” Brix said, referring to the process of electrochemically converting emitted CO2 and water to formic acid, which can then be used to make a suite of products like hydrogen, carbon monoxide, and formate (methanoate) derivatives. “We are close to industrial size on our plants right now.”

CO2 is captured from steam methane reformers, natural gas processing and piping, and ammonia production, among other processes. The gas is then combined with water in a cellular, modular process producing formic acid, derivatives of which can be used in a range of industries like pharmaceuticals.

The company recently raised $5m in seed funding from lead investor TO VC, which joined backers LCY Lee Family Office, MIH Capital Management, and Halliburton Labs. An additional $8m has been raised in grant funding from the US departments of Energy (DOE) and Defense (DOD).

The company is also partnered with the Nutrien Corporation on a small scale facility in Kennewick, Washington, just upriver from Richland, Brix said. Financing for that project is largely arranged with the FEED completed.

Brix owns a majority of the company with his father.

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Mitsubishi laying groundwork for additional equity raise

Mitsubishi Power Americas and its JV partners are preparing to raise additional equity for the ACES Delta project in Utah, as well as for other hydrogen developments in the Americas.

Mitsubishi Power Americas is conferring with its financial partners to raise equity from existing investors in the Advanced Clean Energy Storage (ACES) Delta green hydrogen project in Utah, Senior Vice President, Investment and Business Development Ricky Sakai said in an interview.

Haddington Ventures formed Haddington ESP I and raised $650m in June 2022 from institutional investors to fund projects developed by ACES Delta, which is a joint venture between Mitsubishi Power Americas and Haddington portfolio company Magnum Development.

The investors — AIMCo, GIC, Manulife Financial Corporation, and Ontario Teachers’ Pension Plan Board — have additional rights to increase their collective investment to $1.5bn, according to a press release announcing the deal.

The first phase of the project in Utah will be to produce 100 tons of hydrogen per day. Once that is complete, existing investors can scale up their investment, Sakai said.

ACES Delta rendering

Mitsubishi is involved in several regional hydrogen hubs applying for funding from the US Department of Energy.

Hydrogen capable

Depending on how that $7bn is ultimately allocated, Mitsubishi is interested in replicating the Utah project in other regions, a source familiar with the company said.

MPA and Magnum recently closed on a $504.4m loan guarantee from the DOE for ACES Delta, electrolyzers for which will be supplied by Norway-based HydrogenPro.

ACES Delta will support the Intermountain Power Agency’s IPP Renewed Project — upgrading to an 840 MW hydrogen-capable gas turbine combined cycle power plant using Mitsubishi’s M501JAC gas turbines. The plant will initially run on a blend of 30% green hydrogen and 70% natural gas starting in 2025 and incrementally expand to 100% green hydrogen by 2045.

Mitsubishi is also supplying the hydrogen-capable gas turbines to Entergy’s Orange County Advanced Power Station; to an Alberta coal plant owned by Capital Power; and to J-Power’s Jackson Generation Project in Illinois, which reached commercial operations last year.

Mitsubishi Power

Investing in startups

Mitsubishi is doubling down on a strategy of investing in startup producers and technology in renewable fuels, Sakai said.

Recent investments in the space include: C-Zero, a drop-in decarbonization tech startup in California; Cemvita Factory, a Houston-based synthetic biology firm focused on the decarbonization of heavy industries; Infinium, an electrofuels company innovator in California forming decarbonization solutions for industries in Japan; and Starfire Energy, a modular green ammonia solution provider in Denver.

Series A and Series B valuations for US companies are much higher now than they were a few years ago, Sakai said. Still, the US is the leading climate tech startup ecosystem in the world and provides rich opportunity for capital deployment, Sakai said. Biofuels, SAF and waste-to-energy are leading sectors for MHI investment moving forward.

“We have several hundred of these in the pipeline that we are looking at right now,” he said. “In the next few years, we will increase the number of these portfolio companies.”

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