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Biofuels developer increases Florida landholdings for ethanol production

Blue Biofuels has leased additional land in southwest Florida to grow king grass for the production of bio-ethanol and sustainable aviation fuel.

Blue Biofuels has leased an additional 167 acres of farmland in southwest Florida on which it intends to grow king grass for the production of bio-ethanol and sustainable aviation fuel through its patented Cellulose-to-Sugar (CTS) process.

This acquisition brings the total amount of land up to 182 acres. This land increase is a necessary step to provide sufficient feedstock for the next step up in capacity after the recent success of the pilot line, according to a news release.

The land should provide sufficient feedstock to create around 500,000 gallons of ethanol per year. It will further be used to optimize the planting, growing, and harvesting of large volumes of king grass on the way forward to commercial production. In commercial production, Blue Biofuels expects to reduce carbon emissions by over 80% as compared to fossil fuels.

“This is a necessary step forward for the company that will provide sufficient feedstock for further upscaling to semi-commercial scale,” said CEO Ben Slager. “We expect to sow this additional land in a manner to allow for continuous cycles of planting and harvesting to yield a regular, uninterrupted supply of ready-to-process king grass.”

As has been previously reported, Blue Biofuels achieved full conversion of cellulose into soluble sugars at a rate of around 100 times that of our CTS prototype. These positive results give us the basis to make the decision to move forward with a further scale-up to a semi-commercial scale and increase feedstock production to the required levels.

Blue Biofuels Cellulose-to-Sugar (CTS) technology is an environmentally friendly, sustainable, and renewable green energy system. The CTS process has a near-zero carbon footprint that can convert virtually any plant material – grasses, forestry products, and agricultural waste such as sugarcane bagasse and wheat straw — into sugars and lignin. Sugars are subsequently processed into biofuels and lignin may be further processed into a variety of products. The CTS process is a patented and proprietary technology wholly owned by Blue Biofuels.

Blue Biofuels’ management believes that biofuel originating from the Company’s CTS process will be eligible to receive the US EPA’s generous D3 cellulosic Renewable Fuel Credits. The D3 credit is currently around $1.95/gallon of ethanol, which could provide income in addition to that from ethanol sales. This incentive is offered to all domestic cellulosic fuel producers whose fuel is used in the transportation industry. The Environmental Protection Agency’s current volume targets for cellulosic ethanol are 720 million gallons for 2023, 1.42 billion gallons for 2024, and 2.13 billion gallons for 2025.

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OPAL Fuels inks credit facility led by Apollo credit arm

The $500m credit facility will fund the RNG company’s growth initiatives. Apollo’s infrastructure credit arm, Apterra, led the deal.

OPAL Fuels Inc., a vertically integrated producer and distributor of renewable natural gas (RNG) and renewable electricity, has closed on a new $500m senior secured credit facility, according to a news release.

The credit facility consolidates certain existing indebtedness and provides approximately $300 million in availability, which is anticipated to be used principally for development and construction of renewable energy projects.

“The closing of this Credit Facility provides OPAL Fuels significant liquidity and financial flexibility to fund our strategic growth initiatives,” said Jonathan Maurer, co-chief executive officer of OPAL Fuels. “This facility further supports growth through the funding of the next phase of our Advanced Development Pipeline. It also streamlines the balance sheet and strengthens our standing as a leading, vertically integrated presence in the industry.”

Apterra Infrastructure Capital LLC functioned as Sole Bookrunner and Syndication Agent for the Credit Facility and Bank of America, N.A. is Administrative Agent.

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Sumitomo eyeing stake in Calgary carbon capture project

Sumitomo has been granted the right to acquire an equity interest in the East Calgary Carbon Transportation & Sequestration Project.

Reconciliation Energy Transition Inc. and Sumitomo Corporation of Americas, a subsidiary of Sumitomo Corporation, have entered into an agreement whereby RETI has granted Sumitomo the exclusive right to acquire a significant equity interest in the East Calgary Carbon Transportation & Sequestration Project.

The CTS Hub is a proposed CO2 transportation and sequestration development project that is expected to involve constructing compression capacity, a COpipeline network, and injection and monitoring wells to support permanent sequestration of CO2 in deep saline aquifers at a location east of Calgary, according to a news release.

The project has an estimated first phase targeted CO2 storage volume of 3.0 million tonnes per annum.

“We are pleased to welcome Sumitomo to our East Calgary CTS Hub. They are one of the world’s leading trading and business investment companies and we are excited to work with their dedicated CCUS team. This partnership, with our commitment to Indigenous ownership, is a pivotal step to bring the CTS project to fruition.” said Stephen Mason, Chairman & CEO of RETI.

“We are delighted to partner with RETI and its commitment to meaningful Indigenous ownership on the development of the CTS Hub. The mitigation of climate change is one of our key areas of focus and we recognize that CCUS is a key technology in that battle,” said Shinichi “Sandro” Hasegawa, General Manager of Energy Innovation Initiative Americas at Sumitomo Corporation of Americas.

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Bloom Energy starts new commercial electrolyzer line

The new line increases the company’s generating capacity of electrolyzers to 2 GW.

Bloom Energy Corporation has inaugurated its high volume commercial electrolyzer line at the company’s plant in Newark, Delaware, according to a press release.

The new line increases the company’s generating capacity of electrolyzers to 2 GW.

In the last decade, the facility has produced over 1 gigawatt (GW) of fuel cell-based Energy Servers. The Bloom Electrolyzer relies on the same solid oxide technology platform used to produce electricity, so the company can streamline existing manufacturing.

The technology is being demonstrated in partnerships withand Idaho National Labs to harness nuclear and steam power, and will be demonstrated with LSB Industries, Inc. to decarbonize industrial and agricultural sectors. Internationally, the technology is in use in South Korea.

In July of this year Bloom Energy opened a 164,000 square foot, multi-gigawatt facility in Fremont, California, representing USD 200m in investment and bringing Bloom’s California headcount to nearly 2,000 in addition to its 715 Delaware employees.

Bloom recently announced plans to install a 240-kW electrolyzer at the Xcel Energy Prairie Island nuclear plant in Welch, Minnesota.

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Exclusive: OCI Global exploring ammonia and methanol asset sales

Global ammonia and methanol producer OCI Global is working with an investment bank to explore a sale of ammonia and methanol assets as part of the re-opening of its strategic business review.

OCI Global is evaluating a sale of several ammonia and methanol assets as part of the re-opening of its strategic business review.

The global producer and distributor of methanol and ammonia is working with Morgan Stanley to explore a sale of its ammonia production facility in Beaumont, Texas, as well as the co-located blue ammonia project under development, according to sources familiar with the matter.

The evaluation also includes OCI’s methanol business, one of the sources said.

Representatives of OCI and Morgan Stanley did not respond to requests for comment.

As part of the earlier strategic review announced last year, OCI in December announced the divestiture of its 50% stake in Fertiglobe to ADNOC, and the sale of its Iowa Fertilizer Company to Koch Industries, bringing in $6.2bn in total net proceeds.

However, OCI has received additional inbound inquiries from potential acquirers for the remaining business, leading it to re-open the review, CEO Ahmed El-Hoshy said last month on OCI’s 4Q23 earnings call.

“As such, OCI is exploring further value creative strategic actions across the portfolio, including the previously announced equity participation in its Texas blue clean ammonia project,” he said, adding: “All options are on the table.”

The comments echoed the remarks of Nassef Sawiris, a 40% shareholder of OCI, who recently told the Financial Times that OCI could sell off most of its assets and become a shell for acquisitions.

In the earnings presentation, El-Hoshy took time to lay out the remaining pieces of the business: in particular, OCI’s 350 ktpa ammonia facility in Beaumont; OCI Methanol Group, encompassing 2 million tons of production capacity in the US and a shuttered Dutch methanol plant; and its European ammonia/nitrogen assets.

Texas blue

The Texas blue ammonia project is a 1.1 million-tons-per-year facility that OCI touts as the only greenfield blue ammonia project to reach FID to date. The company has invested $500m in the project as of February 24, out of a total $1bn expected investment, according to a presentation.

“Commercial discussions for long-term product offtake and equity investments in the project are at advanced stages with multiple parties,” El-Hoshy said. “This reflects the very strong commercial interest and increasing appetite from the strategics to pay a price premium to secure long-term low-carbon ammonia.”

El-Hoshy’s comments highlight the fact that, unlike most projects in development, OCI took FID on the Texas blue facility without an offtake agreement in place. The executive did, however, highlight the first-mover cost advantages from breaking ground on the project early and avoiding construction cost inflation.

Additionally, the project was designed to accommodate a second 1.1 mtpa blue ammonia production line, which would be easier to build given existing utilities and infrastructure, El-Hoshy said, allowing for an opportunity to capitalize on additional clean ammonia demand at low development costs.

“Line 2 probably has the biggest advantage, we think, in North America in terms of building a plant where a lot of the existing outside the battery limits items and utilities are already in place,” he said, emphasizing that by moving early on the first phase, they avoided some of the inflationary EPC pressures of recent years. 

At the facility OCI will buy clean hydrogen and nitrogen over the fence from Linde, and Linde, in turn, will capture and sequester CO2 via an agreement with ExxonMobil.

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Pennsylvania RNG firm outlines strategic outlook

A growing RNG developer, owner and operator based in Pennsylvania is anticipating a liquidity event on the part of its private equity owner — once it has locked down a “critical mass” of projects.

Vision RNG, a developer of US RNG projects, could see its next project reach commercial operations in Tennessee in a line of projects in southeastern and mid-western states, CEO Bill Johnson said in an interview.

Vision Ridge Partners, a private equity firm, is the majority owner of the company. Management owns the remaining minority stake.

The company is still in early stages and would likely need to get something like six projects to COD before a liquidity event.

“Locking down projects creates a lot of value,” Johnson said, noting that Vision Ridge will likely follow a typical private equity monetization pattern.

The company’s project at Meridian Waste’s Eagle Ridge Landfill in Bowling Green, Missouri is fully operational. It uses 1,500 scfm of landfill gas (LFG) and produces 375,000 MMBtu of RNG annually.

That mid-sized project is similar in scale to what is being developed in Tennessee, which will likely be the next project to reach COD, Johnson said, declining to provide details on exact location.

“We’re working on developing other opportunities with some of the largest publicly owned landfill companies in the country,” Johnson said.

Projects require between $20m and $60m in capex, ranging from small to large, Johnson said. Vision Ridge takes care of the company’s equity requirements.

Debt options are being considered on a project-by-project basis, he said. Debt tends to range from 50% to 70% of total spend.
“We’ll look to put reasonable project debt on these,” he said.

Vision has not to date retained the services of an investment bank, Johnson said.

Vision is pursuing opportunities in Kentucky, Alabama, South Carolina and Oklahoma, and will evaluate suppliers of services and equipment for each. The location-agnostic company is also open to new relationships with potential future financial and strategic acquirers.

“If you are a private equity group, you’re a potential buyer of the company at some point, so we would be happy to know them and keep their interest in us up,” Johnson said. An acquirer would not necessarily need to have expertise in RNG.

M&A potential

M&A of projects is an option on the table, Johnson said. But returns are better if Vision develops its own projects; and a more challenging macroeconomic environment makes acquisitions somewhat unlikely.

“With the market premiums being paid, I see us continuing to keep our head down and focusing on organic growth,” Johnson said.

Johnson said he expects to see continued consolidation in the greater market. Many large strategic and midstream companies have yet to make significant buys in RNG.

He pointed to bp’s acquisition of Archaea Energy as a significant milestone in the RNG market.

“There’s quite a number of potential acquirers,” Johnson said. “The market is kind of fundamentally and always will be under-supplied and over-demanded.”

Vision would potentially be open to a merger with a portfolio company of a strategic or PE investor, Johnson said.

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Caliche CEO talks hydrogen and CO2 storage expansion

Following the acquisition of assets in Texas and California, Caliche Development Partners CEO Dave Marchese discusses opportunities for growth in the hydrogen and C02 storage market.

Caliche Development Partners II has made a pair of acquisitions with the aim of expanding into growing hydrogen and CO2 storage markets in Texas and California, CEO Dave Marchese said in an interview.

The company, which is backed by Orion Infrastructure Capital and GCM Grosvenor, this week announced the purchase of Golden Triangle Storage, in Beaumont, Texas; and the anticipated acquisition of Central Valley Gas Storage, in Northern California – two regions with increasing demand for storage to support variable power loads, natural gas liquefaction, and high penetrations of renewable resources.

Caliche and seller Southern Company did not use financial advisors for the transaction. Caliche used Willkie Farr as its law firm for the financing and the transactions.

Marchese, who has a private equity background and first worked on a successful investment in a fuel cell company in the year 2000, has also racked up years of experience investing in and operating underground storage assets. The Caliche team developed and sold a natural gas liquids and helium storage business – called Coastal Caverns – earlier this year.

“We know how to put things underground and keep them there, including very small molecules, and we have relationships with many of the customers that are using hydrogen today,” he said.

Roughly a third of the industrial CO2 emissions on the Gulf Coast come from the Golden Triangle area, a region in Southeast Texas between the cities of Beaumont, Port Arthur, and Orange. Much of this CO2 comes from the steam methane reformers that are within 15 miles of Caliche’s newly acquired Golden Triangle asset, Marchese said. The site is in similar proximity to pipelines operated by the air companies – Air Products, Air Liquide, and Praxair – that run from Corpus Christi to New Orleans.

“We’re within 15 miles of 90% of the hydrogen that’s flowing in this country today,” he added. “Pipeline systems need a bulk storage piece to balance flows. We can provide storage for an SMR’s natural gas, storage for its hydrogen, and we can take away captured CO2 if the plant is blue.”

The Golden Triangle site, which sits on the Spindletop salt dome, has room and permits for nine caverns total, with two currently in natural gas service. Three of those caverns are permitted for underground gas storage. “We could start a hydrogen well tomorrow if we had a customer for it,” Marchese said.

The Central Valley assets in Northern California are also positioned for expansion, under the belief that the California market will need natural gas storage for some time to support the integration of renewables onto the grid, he said. Additionally, the assets have all of the safety, monitoring and verification tools for sequestration-type operations, he added, making it a good location to start exploring CO2 sequestration in California. “We think it’s an expansion opportunity,” he said.

“Being an operator in the natural gas market allows us to enter those other markets with a large initial capital investments already covered by cash flowing business, so it allows us to explore incrementally the hydrogen and CO2 businesses rather than having to be a new entrant and invest in all the things you need to stand up an operation.”

Caliche spent $186m to acquire the two assets, following a $268m commitment from Orion and GCM. The balance of the financial commitment will support expansion.

“We’re capitalized such that we have the money to permit, build, and operate wells for potential CO2 sequestration customers,” he said. “The relationship with these stable, large investors also meets the needs of expansion projects: if somebody wanted not only a hydrogen well but compressors as well, we have access to additional capital for underwritten projects to put those into service.”

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