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Aemetis receives second $25m loan for California RNG project

The loan will finance the construction of biogas digesters and related assets for eight dairies located in Stanislaus County and Merced County, California.

Greater Commercial Lending has completed its second $25m loan for the Aemetis Biogas Central Dairy Digester Project, according to a news release.

The first $25 million loan was completed in October 2022.

Magnolia Bank of Elizabethtown, Kentucky provided the primary funding for the loan, which was made to Aemetis Biogas 2, a wholly owned subsidiary of Aemetis.

The Hydrogen Source reported in February that Aemetis had $1.2bn in biogas and sustainable aviation fuel (SAF) projects in development. The Riverbank SAF plant in California will be fully engineered and permitted this year.

The loan, guaranteed by the U.S. Department of Agriculture (USDA) through the Rural Energy for America Program (REAP), will finance the construction of biogas digesters and related assets for eight dairies located in Stanislaus County and Merced County, California.

The digesters capture biomethane from animal waste, which is delivered via pipeline to a central facility that converts the biogas into RNG for use as a transportation fuel.

The second phase of the project will expand Aemetis Biogas from its current seven operational dairy digesters to biogas digesters at 15 dairies, supplying an estimated 400,000 MMBtu per year.

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Williams and Daroga sign MoU to find offtake options

The companies will identify long-term end-use customers for clean hydrogen and offtake options for environmental attributes generated by hydrogen production in Wyoming.

Williams has signed a memorandum of understanding (MOU) with Daroga Power to identify long-term end-use customers for clean hydrogen and offtake options for environmental attributes generated by hydrogen production in Wyoming.

Williams plans to leverage its nationwide assets for the blending, storage and transportation of clean hydrogen to local and regional markets, including the Pacific Northwest via the company’s 4,000-mile bi-directional Northwest Pipeline transmission system that passes through Wyoming.

Deliveries of hydrogen could begin as soon as 2025.

The company is currently working with the University of Wyoming’s School of Energy Resources to evaluate hydrogen production and the impacts of hydrogen blending on existing energy infrastructure in Wyoming. The research is funded by a grant from the Wyoming Energy Authority and is expected to be complete in 2023.

Daroga is a New York-based investor and developer of distributed generation energy assets, including hydrogen fuel cells and solar power generation.

Beyond Wyoming, Williams has joined several recently launched industry-led regional alliances including Appalachian Energy Future (AEF) and Appalachian Regional Clean Hydrogen Hub, or Arch2. Williams is also engaged with the New York State Energy Research and Development Authority (NYSERDA).. Williams has identified two potential projects to deliver hydrogen in New York and New Jersey using the company’s existing infrastructure.

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Exxon to buy Denbury for $4.9bn

In acquiring Denbury, the oil major is advancing its strategy for carbon capture and transportation.

Exxon Mobil Corporation has entered into a definitive agreement to acquire Denbury Inc., an experienced developer of carbon capture, utilization and storage (CCS) solutions and enhanced oil recovery, according to a news release.

The acquisition is an all-stock transaction valued at $4.9bn, or $89.45 per share based on ExxonMobil’s closing price on July 12, 2023. Under the terms of the agreement, Denbury shareholders will receive 0.84 shares of ExxonMobil for each Denbury share.

“Acquiring Denbury reflects our determination to profitably grow our Low Carbon Solutions business by serving a range of hard-to-decarbonize industries with a comprehensive carbon capture and sequestration offering,” said Darren Woods, Chairman and CEO. “The breadth of Denbury’s network, when added to ExxonMobil’s decades of experience and capabilities in CCS, gives us the opportunity to play an even greater role in a thoughtful energy transition, as we continue to deliver on our commitment to provide the world with the vital energy and products it needs.”

The transaction synergies are expected to drive strong growth and returns for ExxonMobil. The acquisition of Denbury provides ExxonMobil with the largest owned and operated CO2 pipeline network in the U.S. at 1,300 miles, including nearly 925 miles of CO2 pipelines in Louisiana, Texas, and Mississippi – located within one of the largest U.S. markets for CO2 emissions, as well as 10 strategically located onshore sequestration sites. A cost-efficient transportation and storage system accelerates CCS deployment for ExxonMobil and third-party customers over the next decade and underpins multiple low carbon value chains including CCS, hydrogen, ammonia, biofuels, and direct air capture.

Chris Kendall, Denbury’s President and Chief Executive Officer commented, “This transaction is a compelling opportunity for Denbury to join an admired global energy leader with a low-carbon focus, a robust balance sheet and a leading shareholder return program. Over the last few years, Denbury has made significant progress executing our strategic plan, strengthening our enhanced oil recovery operations and capitalizing on our unrivaled infrastructure to accelerate the growth of our CO2 transportation and storage business. To build even further on this positive momentum, the Denbury Board of Directors and management team undertook a thorough review process and considered a number of alternatives to maximize long-term value. Through this process, it became clear that the transaction with ExxonMobil is in the best interests of our company, our shareholders, and all Denbury stakeholders. Importantly, given the significant capital and years of work required to fully develop our CO2 business, ExxonMobil is the ideal partner with extensive resources and capabilities. The all-equity consideration will allow Denbury shareholders to participate in the upside of ExxonMobil’s stock while benefitting from its strong capital return strategy. We look forward to bringing together our highly complementary cultures and teams to realize the long-term value and benefits of this combination.”

“Denbury’s advantaged CO2 infrastructure provides significant opportunities to expand and accelerate ExxonMobil’s low-carbon leadership across our Gulf Coast value chains,” said Dan Ammann, President, ExxonMobil Low Carbon Solutions. “Once fully developed and optimized, this combination of assets and capabilities has the potential to profitably reduce emissions by more than 100 million metric tons per year in one of the highest-emitting regions of the U.S.”

In addition to Denbury’s carbon capture and storage assets, the acquisition includes Gulf Coast and Rocky Mountain oil and natural gas operations. These operations consist of proved reserves totaling over 200 million barrels of oil equivalent, with 47,000 oil-equivalent barrels per day of current production, providing immediate operating cash flow and near-term optionality for CO2 offtake and execution of the CCS business.

The boards of directors of both companies have unanimously approved the transaction, which is subject to customary regulatory reviews and approvals. It is also subject to approval by Denbury shareholders. The transaction is expected to close in the 4th quarter of 2023.

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US SAF producer targeting 1H24 monetization

Calumet Specialty Products subsidiary Montana Renewables – now the largest producer of sustainable aviation fuel in North America – has received interest for the business indicating valuations in excess of the entire company’s current enterprise value.

Calumet Specialty Products is expecting to close on a monetization of a minority equity stake by early 2024 in its Montana Renewables subsidiary, which is now the largest sustainable aviation fuel producer in North America.

The company has been exploring a monetization, including an IPO, of Montana Renewables with Lazard as an advisor since last year, and would use proceeds to deleverage the parent company. Executives said today they are speaking with bulge bracket banks regarding the timing of a potential IPO or minority stake sale.

“We continue to expect a potential monetization of Montana Renewables to complete the deleveraging of Calumet,” CEO Todd Borgman said in prepared remarks. “For some time we’ve discussed the possibility of a Montana Renewables IPO, private monetization, or even both. We continue to receive clear feedback: that Montana Renewables is a differentiated business, with transformational value potential to Calumet, well in excess of the entire company’s enterprise value.”

Calumet had engaged Lazard last year to conduct a process that culminated in a $250m investment in Montana Renewables from Warburg Pincus in August, 2022. The investment, in the form of a participating preferred equity security, valued Montana Renewables at a pre-commissioning enterprise value of $2.25bn.

The facility began making SAF shipments to Shell as an offtaker earlier this year.

In response to a question, Calumet executives pointed to the enterprise values of publicly traded energy transition companies, noting that Montana Renewables should align with that “at a minimum, if not get a premium for the competitive advantages that we’ve got, due to location, due to advanced pre-treater technology we’ve got, and due to the fact that we’re now North America’s largest SAF producer.”

Calumet’s equity trades at $15.80 per share and a $1.26bn market cap.

The company is evaluating an expansion of its SAF production at Montana Renewables and has purchased a second reactor and applied for a $600m loan from the DOE.

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AIMCo-backed midstream infrastructure firm in refi

The company, whose asset footprint includes Gulf Coast hydrogen production, today priced a debt refinancing transaction with an 8.875% coupon.

Howard Energy Partners today priced $550m of senior unsecured notes to refinance amounts outstanding on its revolving credit facility.

The company, which is majority owned by the Alberta Investment Management Corporation (AIMCo), will pay 8.875% on the notes, inside of price talk of between 8.75% – 9%, according to sources familiar with the matter.

RBC Capital Markets and TD Securities are joint active bookrunners on the deal, the sources said.

Howard in 2021 closed on the acquisition of the Javelina Facility in Corpus Christi, Texas — a treating and fractionation plant that extracts olefins, hydrogen, and natural gas liquids from the gas streams produced by local refineries.

Starting in Jan of 2023, a strategic technology partner began producing a low-carbon diesel substitute using Javelina’s hydrogen and CO2 as feedstocks, making it one of the first merchant “clean” hydrogen facilities on the US Gulf Coast, according to the company. HEP is also pursuing carbon capture and sequestration opportunities with its Javelina assets through a joint venture with TALOS Energy and the Port of Corpus Christi.

AIMCo acquired an initial 28% stake in HEP in 2017, and brought its ownership stake to 87% last year following the purchase of Astatine Investment Partners’ stake in the company.

Howard operates in two key segments in the US and Mexico: natural gas and liquids. The natural gas segment includes 1,175 miles of pipelines and approximately 4.3 Bcf/d of throughput capacity and 600 MMCf/d of cryogenic processing capacity.

The liquids segment includes terminalling and logistics services for refined products as well as refinery-focused off-gas handling, treating, processing, fractionation and hydrogen supply services.

Spokespersons for the company, RBC, and TD did not respond to emails seeking comment.

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Exclusive: Banker enlisted for CO2-to-SAF capital raise

BofA Securities is running a capital raise for a US-based CO2-to-SAF technology provider and project developer with a global pipeline of projects.

eFuels developer Infinium has launched a Series C capital raise along with efforts to advance unannounced projects in its development pipeline, Ayesha Choudhury, head of capital markets, said in an interview.

Bank of America has been engaged to advise on the capital raise.

Infinium recently announced the existence of Project Roadrunner, located in West Texas, which will convert an existing brownfield gas-to-liquids project into an eFuels facility delivering products to both US and international markets. Breakthrough Energy Catalyst has contributed $75m in project equity.

Infinium, which launched in 2020, closed a $69m Series B in 2021, with Amazon, NextEra and Mitsubishi Heavy Industries participating. Its Project Pathfinder in Corpus Christi is fully capitalized.

About a dozen projects, split roughly 50/50 between North America and the rest of the world, are in development now, Choudhury said. The company is always scouting new projects and is looking for partners to provide CO2, develop power generation and offtake end products.

A CO2 feedstock agreement for a US Midwest project with BlackRock-backed Navigator CO2 Ventures was recently scrapped after the latter developer cancelled its CO2 pipeline project.

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Exclusive: Seattle biomass-to-chemical firm planning equity round

A firm with plans for a biorefinery in Washington state will raise its first large equity round early next year.

Planted Materials, a Seattle-based biomass-to-chemicals company, is in early design stages for its first biorefinery in eastern Washington state and planning to raise an equity round in early 2025, co-founders Noah Belkhous and Greg Jenson said in an interview.

The company will seek to raise between $10m and $20m ahead of FID on the biorefinery, Belkhous said. The four-year-old company has raised $500k from angel investors to date and is currently raising another $1m from high net worth individuals in the Seattle region.

Planted Materials does not have a relationship with a financial advisor but is open to one, Belkhous said.

The company’s recycling model takes municipal landfill waste and converts it to chemical materials for pharmaceutical, paper, plastic and other manufacturing industries.

The proprietary recycling process is something the company would like to license to municipalities in the US and abroad, in addition to building biorefineries in the Pacific Northwest, Belkhous said. The company’s lab is currently based in the Ballard neighborhood of Seattle.

Early design work on the first biorefinery is underway. The duo expects CapEx to cap at $50m, reaching FID in 2026 and beginning construction that year.

While the majority of the company’s feedstock will likely come from the major metropolitan regions in the western PNW, refining capacity is more attractive in the east for reasons of space and existing waste management infrastructure. Jenson noted the presence of the relevant research campus of Washington State University in Pullman, as well as the Pacific Northwest National Laboratory in Richland.

Recently, the team accompanied Washington Governor Jay Inslee and members of the Washington State Department of Commerce on a trip to Sydney and Melbourne in Australia. The company has applied to a pair of $350k grants from the state.
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