Resource logo with tagline

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.

Unlock this article

The content you are trying to view is exclusive to our subscribers.
To unlock this article:

You might also like...

RONN Motor Group completes paperwork for SPAC merger

The Arizona-based Hydrogen Fuel Cell automaker has to-date delayed the completion of their S-1 because of market conditions.

RONN Motor Group, a multi-National hydrogen solution company, has completed all significant filings, including the u-1 filing, to list on the NASDAQ through a reverse triangular merger with Lee Pharmaceuticals, according to a news release.

RONN Motor Group created one of the first hydrogen-assisted supercars in 2008 and has been active in the automotive space for many years. The company will be submitting the application for a corporate name change to “RONN” along with a ticker change, but their logo will remain.

The company’s form 10 submission had begun; RONN plans to complete their S-1 in 2023, which was delayed in 2022 due to market conditions. The S-1 will be completed with updated financials when market conditions improve.

Read More »

FuelCell Energy reaches COD on Connecticut fuel cell plant

The 7.4 MW project on the U.S. Navy Submarine Base is financed in part through a previously announced tax equity financing transaction with East West Bank.

FuelCell Energy, Inc. completed site construction and commencement of commercial operations (COD) for its project on the U.S. Navy Submarine Base in Groton, Connecticut on December 16, 2022, according to a news release.

Achieving commercial operations of this project adds 7.4 MW to the company’s generation operating portfolio, bringing the total to 43.7 MW, although the project will operate at approximately 6 MW during the first year of operation.

“We are excited to announce COD of our grid resiliency and micro-grid ready clean energy project at the U.S. Navy Submarine Base, bringing cleantech innovation to our country’s most critical infrastructure,” said Jason Few, president and chief executive officer, FuelCell Energy. “FuelCell Energy is proud to deliver a solution that supports the Navy’s decarbonization goals while encouraging clean energy partnerships and policies that enable the deployment of crucial grid modernization technology needed for the electrical grid in Connecticut and around the world.”

The project is financed in part through a previously announced tax equity financing transaction with East West Bank for $15m contributed to the project over three years.

This milestone partnership is East West Bank’s first fuel cell project, a testament to the value proposition of FuelCell Energy’s differentiated clean energy platforms.

Read More »

Airbus and LanzaJet to collaborate on SAF production

The MOU establishes a relationship between LanzaJet and Airbus to advance the building of SAF facilities that will use the LanzaJet Process.

LanzaJet, a sustainable fuels technology company and Airbus, a global leader in the aerospace, commercial aircraft, helicopter, defense, and space sectors, today announced they have entered into a memorandum of understanding (MOU) to address the needs of aviation through the production of sustainable aviation fuel (SAF), according to a news release.

The agreement was signed by Jimmy Samartzis, CEO of LanzaJet and Julie Kitcher, EVP, corporate affairs and sustainability at Airbus and announced during the Paris Air Show.

The MOU establishes a relationship between LanzaJet and Airbus to advance the building of SAF facilities which will use the LanzaJet Process™, a leading, proven, and proprietary Alcohol-to-Jet (ATJ) technology. This agreement also aims to accelerate the certification and adoption of 100% drop-in SAF which would eliminate the use of fossil fuels without necessitating any changes to existing aircraft or infrastructure. The aviation industry is responsible for approximately 2-3% of global carbon dioxide emissions, and SAF has been identified by airlines, governments, and energy leaders as one of the most immediate solutions to decarbonize aviation, together with the renewal of the fleets by latest generation aircraft and better operations.

“SAF is the best near-term solution to reducing aviation emissions and this collaboration between LanzaJet and Airbus is an important step forward in the fight against climate change and enabling the global energy transition,” said Jimmy Samartzis, CEO of LanzaJet. “We look forward to continuing our work with Airbus and further grow our joint impact across the globe.”

LanzaJet’s proprietary ATJ technology uses low-carbon ethanol to create SAF that reduces greenhouse gas emissions by more than 70% percent compared to fossil fuels and can further decrease emissions with a suite of carbon reduction technologies. SAF produced through LanzaJet’s ATJ technology is an approved drop-in fuel compatible with existing aircraft and infrastructure.

“We are delighted to grow our partnership with LanzaJet, a leading company in the SAF production ecosystem. At Airbus we are committed to supporting SAF as a major lever in the reduction of CO2 emissions on the decarbonization roadmap,” says Julie Kitcher, EVP, corporate affairs and sustainability at Airbus. “With LanzaJet as a trusted partner, we can support the acceleration of the Alcohol-to-Jet SAF production pathway and at scale. This collaboration will also explore technological developments to enable Airbus aircraft to be capable of flying up to 100% SAF before the end of the decade.”

Besides working on the technical aspects and concrete SAF projects, LanzaJet and Airbus will investigate business opportunities across the world with airlines and other stakeholders.

Read More »

Exclusive: Verde Clean Fuels seeking project finance for gas refineries

Publicly listed Verde Clean Fuels plans to seek equity and debt investors for low-carbon gasoline refineries it expects to deploy across the US. We spoke to CEO Ernest Miller about the strategy.

Verde Clean Fuels, a publicly listed developer of clean fuels technology and projects, is planning to seek project debt and equity investors to finance a series of low-carbon gasoline refineries it expects to deploy across the US.

Houston-based Verde, which employs syngas-to-gasoline refining technology, recently announced an agreement with Diamondback Energy to construct a facility in the Permian Basin that will utilize stranded natural gas to produce 3,000 barrels per day of gasoline.

The company is also pursuing a carbon-negative gasoline project on the premises of California Resources’ Net Zero Industrial Park in Bakersfield, California. The California project will produce approximately 500 barrels of RBOB renewable gasoline per day from agricultural waste, while capturing and sequestering around 125,000 tons of CO2 per year.

Verde is capitalized following a private investment in public equity (PIPE) injection of $54m as part of a reverse merger last year, allowing the company to take the Bakersfield and West Texas projects through the FEED phase, CEO Ernest Miller said in an interview.

Underpinning Verde’s business model is the view that gasoline will persist as a transportation fuel for many years to come, and that very few parties are working to decarbonize the gasoline supply chain.

“Between renewable diesel, renewable natural gas, and sustainable aviation fuel, there is very little awareness that renewable gasoline is even a thing,” Miller said. “The addressable market is enormous, and the impact that can be made by taking even a sliver of that market is enormous.”

Miller says that many market participants believe that electric vehicles will solve the emissions problem from road transport.

“The fact is that gasoline has a very, very long runway ahead of it,” he said. “Regardless of the assumptions you want to make about EV penetration, the volume of gasoline that we continue to use for the foreseeable future is huge.”

Verde Clean Fuels demo plant.

Verde’s projects are sized in the 500 – 3,000 barrels per day range, making them a unique player at the smaller end of the production range. The only other companies with similar methanol-to-gas technology are ExxonMobil and Danish-based Topsoe, which operate at a much larger scale, according to Miller.

Miller recognizes that low-carbon, or negative-carbon, gasoline operates within a complex ecosystem, with the California project potentially playing in that state’s LCFS and D3 RIN markets, in addition to the market for gasoline.

“What I would like to see us do is have an offtaker that plays in all three of those products – so if I can go to Shell Trading, or bp, or Vitol, and get one of them to say, ‘here’s a price,’ and they take all of that exposure and optionality,” Miller said, “that allows me to finance the project without having to manage a whole bunch of different commodity exposures and risk.”

Bakersfield 

The Bakersfield project, estimated to cost $235m to build, will utilize 450 tons per day of agricultural waste to produce gasoline, and sequester CO2 via California Resources’ carbon management company, Carbon TerraVault, a joint venture with Brookfield Renewable.

Because of the carbon sequestration, the project will qualify for incentives under 45Q, but since it is producing, in Miller’s words, “deeply carbon-negative gasoline,” most of the value for the project will come from California’s LCFS program.

In order to qualify for LCFS credits, the Bakersfield facility goes through the full GREET modeling process – including transport of feedstock, processing and refining, and transport away from the facility – returning a negative 125 grams equivalent per MJ carbon intensity score for the project, according to Miller.

As for investors, Verde “would like to see both California Resources and Brookfield Renewable in the project, either individually or through the Carbon TerraVault JV,” Miller said.

Verde is also in discussions with a handful of financial players, including infrastructure and pension funds that are looking for bond-like cash flow that a project finance model can provide. The company has also explored the municipal bond market in California, which would bring to bear a favorable capital structure for the project, Miller said.

Verde is not currently working with a project finance advisor, Miller said, noting that they have in-house project finance experience. In Texas, Verde is working with Vinson & Elkins as its law firm; and in California Verde is working with Orrick as counsel.

Gasoline runway

For the Diamondback facility in West Texas, which requires roughly $325m of capex, both Verde and Diamondback will take equity stakes in the project, and Verde will seek to bring in debt financing to fund the rest of the project costs in a non-recourse project finance deal, Miller said.

The Permian project seeks to provide a pathway to monetize stranded gas in the basin by taking advantage of and alleviating its lack of takeaway capacity, which causes gas prices at the Waha Hub in West Texas to trade at a significant discount to the Henry Hub price.

“Diamondback would take the position that any gas that’s getting consumed in the Permian Basin is gas that’s not getting flared in the Permian Basin,” Miller said, thus making the project a emissions-mitigating option. “There will never be enough natural gas takeaway capacity out of the Permian Basin,” he added, noting that driller profiles are only going to get gassier as time goes on.

Diamondback, for example, produces more in the Permian than it can take out via pipeline, therefore “finding a use, a different exposure, for that gas by turning it into gasoline, is of value for them,” Miller said.

“It’s the same dynamic in the Marcellus and Bakken and Uinta – all the pipeline-constrained basins,” he added, alluding to possible future expansion to those basins.

Read More »
exclusive

Waste-to-hydrogen developer to close $100m capital raise this month

Raven SR’s C-round of financing is being run by two bulge-bracket banks, and the firm has received widespread interest from private equity and corporate strategics.

Raven SR, a US waste-to-hydrogen developer, is working on a $100m capital raise that’s expected to wrap up this month, according to four sources familiar with the matter.

Raven’s C-round of financing is being run by Barclays and Bank of America. The firm has received widespread interest from private equity and corporate strategics.

Raven CEO Matt Murdock said on the sidelines of the Hydrogen Americas event in Washington D.C. that he was hoping to have the raise done by Thanksgiving.

Headquartered in Wyoming with projects in California and Spain, the company uses a steam/CO2 reforming process that transforms municipal solid waste, organic waste and methane into clean fuels.

In August, 2021, Raven closed on a $20m strategic investment from Chevron U.S.A., ITOCHU Corporation, Hyzon Motors Inc. and Ascent Hydrogen Fund. Samsung Ventures made a strategic investment earlier this year, allowing the company to expand into the Asia-Pacific market.

The company has partnered with INNIO to use its Jenbacher engines to provide renewable power and heat to Raven SR’s first waste-to-hydrogen production facility at the Republic Services West Contra Costa Sanitary Landfill in Richmond, California.

Raven SR plans to bring the plant online in the first quarter of 2023, initially processing up to 99.9 tons of organic waste per day and producing up to 2,000 metric tons per year of hydrogen.

In Aragón, Spain, Raven SR is aiming to bring a second project online in 2023 that will produce 1,600 metric tons per year of renewable hydrogen from approximately 75 tons of organic solid waste per day.

Raven SR recently announced the election of Mark Gordon of Ascent Fund and Michael Hoban of Chevron New Energies to its Board of Directors.

Read More »
exclusive

NanoScent seeking new investor to complete blended funding round

NanoScent is seeking a new investor to satisfy the contingencies of a combined EUR 8m investment from existing investors and the European Innovation Council.

NanoScent, an Israel-based technology firm, is seeking a new investor to help solidify an equity investment from the European Innovation Council, CEO Oren Gavriely said in an interview.

To satisfy the contingencies of a combined EUR 8m investment from existing investors and the EIC, NanoScent must bring on a new investor at EUR 2m, Gavriely said.

The ideal investor will have complementary capabilities that can ramp up the revenue stream, Gavriely added. Producers and suppliers of gasses and chemicals for industrial use would make sense.

The money will be used to further develop the proprietary VOCID Purity in-line sensor controller, which measures hydrogen quality by monitoring the cleanliness of gas lines. The technology is oriented towards producers and end-users like fuel cell stations, who will be responsible for the integrity of the hydrogen. The product will be rolled out at the end of 1Q23.

Gavriely said the company has several customers for the technology in the pipeline, declining to say who they are.

NanoScent, founded five years ago, has raised USD 10m in equity to date, with another USD 10m in non-dilutive funding. The company’s largest outside investor is Sumitomo Chemical, which trades on the Tokyo Stock Exchange.

Control of the company is maintained by the founders, Gavriely said.

NanoScent has 20 employees, Gavriely said. So far the company has relied on the expertise of its board, which includes one former investment banker, for financial advisory services. That could change in the future as the company grows.

NanoScent uses Pearl Cohen for law services and EY for accounting.

Read More »

Welcome Back

Get Started

Sign up for a free 15-day trial and get the latest clean fuels news in your inbox.