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BlackRock’s Larry Fink underscores ‘enormous’ capital demands for infrastructure

In acquiring GIP, BlackRock believes that, over the next 10 years, infrastructure and energy investments will become a major component of the private market ecosystem.

The growth of private markets in infrastructure underpins the industrial logic of BlackRock’s $12.5bn deal for infrastructure asset manager Global Infrastructure Partners, BlackRock CEO Larry Fink said today.

In a Friday morning call with analysts, Fink emphasized the expected growth of private capital in infrastructure and energy markets over the next 10 years as a major factor in its acquisition of GIP.

“Growing public deficits, a modernizing digital world, advancing energy independence, and the energy transition are driving the mobilization of private capital to fund critical infrastructure,” Fink said.

“I believe that the amount of capital that is to be needed as we digitize everything, the need to upgrade our power grids worldwide is a must,” he said. “The capital associated with that is going to be enormous.”

BlackRock is acquiring GIP for $3bn of cash and approximately 12 million shares of BlackRock common stock. The combination creates the second-largest global infrastructure private markets business, with over $150m in client assets, according to a presentation.

Fink expects BlackRock to continue to partner with corporations in acquiring asset carve-outs or co-investing in infrastructure projects, such as its deals with Occidental Petroleum (direct air capture) and AT&T (5G buildout).

GIP Founding Partner, Chairman, and CEO Bayo Ogunlesi, who is slated to become a member of BlackRocks’ board following the transaction, highlighted the complementary aspects of the business combination.

“BlackRock has built a terrific infrastructure business,” he said. “But they make mid-market or mid-cap investments. We make large-cap investments.”

He added, “[BlackRock has] a terrific infrastructure debt business that is mostly investment grade, ours is mostly below investment grade. They have a capital solutions business that we don’t have. So if you put these two businesses together, we can go to clients, large cap clients, mid cap clients, offer them a complete array of solutions.”

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Developer inks supply agreement for Kansas CO2 utilization facility

The facility will produce green syngas from CO2 to be used for making products such as hydrogen, synthetic base oils, low-carbon jet fuels, green methanol, and others.

HYCO1, Inc.  announces that it has entered into a 20-year carbon dioxide supply agreement with Kansas Ethanol, located in Lyons, Kansas for the planned construction of the world’s largest biogenic carbon dioxide utilization facility, Green Carbon Synthetics Kansas, LLC.

HYCO1 is a Houston, Texas (USA) based technology company that has created a disruptive CO2 conversion catalyst and related low-cost CO2 process technology. HYCO1 CUBE™ Technology (Carbon Utilization, Best Efficiency) cost-effectively utilizes carbon dioxide and various methane source feedstocks to create low-cost, low-carbon chemical grade syngas in a single pass.

The syngas produced is used to produce low carbon intensity (CI) downstream products.   HYCO1 technology not only lowers the resultant carbon score of the downstream products by 50% to 100% but does so at a competitive cost compared to fossil feedstock derived products and without the requirement of incentives like many other technologies.  HYCO1 technology enables green syngas to be used for making products such as hydrogen, synthetic base oils, low-carbon jet fuels, green methanol, and many others.

The new HYCO1 project to be co-located with Kansas Ethanol will utilize all of their 800 tons per day of CO2 to produce approximately 60 million gallons per year of low-carbon and zero-carbon products.

Kurt Dieker, chief development officer and co-founder of HYCO1, stated, “While there are many paths that an ethanol facility can take to improve sustainability and margins, ranging from additional energy efficiencies to protein separation, in my opinion CO2 utilization represents the leading value-added step for an ethanol production facility.”

The Lyons HYCO1 project is in the engineering stage with plans to complete the pre-construction engineering in 2024. The facility will produce approximately 4,000 barrels per day of first-of-a-kind synthetic Base Lubricating Oils and Low-Carbon Jet Fuel made from CO2. High-performance products include four centistoke base oil for use in the highest grade synthetic motor oils; and a two centistoke base oil currently being tested by EV manufacturers for its ideal battery and drive-train heat transfer and lubrication properties.

The projects’ products are produced with more than 80% reductions in carbon footprints versus traditional fossil-derived products.   Approximately half of the weight of these new sustainable products will consist of biogenic CO2 that would have previously been emitted into the atmosphere.

Mike Chisam, CEO of Kansas Ethanol, said of the project, “Although most ethanol producers are considering or pursuing underground carbon sequestration in our industry to decarbonize, we believe that carbon utilization, which supports a circular carbon economy, represents the best use of our CO2, and positions us more competitively in the market. Value added products made from CO2 that displace fossil derived products represents a win for us at Kansas Ethanol, a win for the U.S. Ethanol Sector, and a win for the global environment. We are looking forward to the construction of the HYCO1-based Green Carbon Synthetics Kansas, LLC facility next to ours. The co-location benefits: carbon dioxide utilization, natural gas offset through waste heat steam production, and additional electricity offsets will position our facility as a world leader of low-carbon ethanol resulting in significant shared savings.” Chisam also noted “HYCO1’s carbon utilization technology enables us to sustainably produce all products, even if, or when, government support incentives are no longer available. That is incredibly important to us.”

HYCO1 is currently evaluating additional project sites and partners to mirror the Green Carbon Synthetics Kansas, LLC project, while also collaborating with downstream technology providers to produce other low-carbon products.

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Uniper and SKW Piesteritz sign ammonia MoU

The agreement calls for SKW Piesteritz, the largest producer of ammonia and urea in Germany, to supply Uniper with sustainably produced ammonia, with SKW Piesteritz supplying green or blue ammonia in the medium to long term.

Uniper and SKW Piesteritz have signed an agreement to support each other in the supply, production and logistics of ammonia and hydrogen derivatives, according to a news release.

Among other things, the agreement calls for SKW Piesteritz, the largest producer of ammonia and urea in Germany, to supply Uniper with sustainably produced ammonia, with SKW Piesteritz supplying green or blue ammonia in the medium to long term.

The two companies will also collaborate closely on imports. The use of Uniper’s import terminal in Wilhelmshaven, for example, will make it easier for SKW Piesteritz to import green ammonia. SKW Piesteritz in turn will provide Uniper with capacities in other European ports via its parent company AGROFERT. The agreement also covers the necessary distribution logistics, the expansion of production capacities and the conversion of ammonia into hydrogen.

This collaboration combines Uniper’s strength in the global procurement of low-carbon and carbon-neutral ammonia, which also includes the expansion of the Wilhelmshaven site into a landing terminal and energy hub, with SKW Piesteritz’s expertise in the production of sustainable ammonia, its distribution logistics and landing capacities in Europe.

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Former thyssenkrupp nucera CEO to lead Canadian electrolyzer startup

Canadian electrolyzer startup Hydrogen Optimized has hired Denis Krupe as CEO.

Hydrogen Optimized Inc., a subsidiary of Key DH Technologies Inc. (KEY), today announced that Denis Krude, former CEO of green hydrogen technology company thyssenkrupp nucera, will be appointed President and CEO starting April 8, 2024.

Company Co-Founder Andrew Stuart will continue to play an active leadership role at Hydrogen Optimized as Executive Chair, according to a news release.

Krude joined the thyssenkrupp Group, one of Germany’s largest industrial companies, in 1998. At thyssenkrupp Uhde, a chemical plant manufacturer, he held a series of progressively senior management positions. From 2016 to 2023, he served as CEO and a Member of the Executive Board at thyssenkrupp nucera, a leading technology and plant engineering company specializing in water electrolysis and green hydrogen. Among his accomplishments there, in 2021-2022 Krude and his team prepared the company for an IPO, leading investor meetings and other activities that set the stage for its successful 2023 public listing.

“The unique focus of Hydrogen Optimized on large-scale water electrolysis solutions for major, hard-to-abate industries aligns with my view that this market segment offers the most significant opportunity in clean hydrogen,” Denis Krude said. “With a strong foundation built on the Stuart family’s 120-year legacy in high-power water electrolysis, I see enormous opportunity for Hydrogen Optimized to become a world leader in clean hydrogen.”

The company’s patented RuggedCell™ system enables clean hydrogen plants up to gigawatt scale. The RuggedCell™ is a precious metal-free, high power alkaline water electrolyzer with a 0-100% dynamic range. Through a strategic relationship with ABB, an investor in KEY, Hydrogen Optimized has strengthened the RuggedCell™ offering through access to ABB’s world-leading power and automation technologies.

Krude, a 54-year-old German national, was born in Spain.

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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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Exclusive: Tenaska advancing 10 CCS projects

Independent power development company Tenaska is advancing a portfolio of more than 10 carbon capture and sequestration hubs across the US. We spoke with Bret Estep, who heads up the CCS strategy for the firm.

Tenaska, a Nebraska-based energy company, is advancing a portfolio of more than 10 carbon capture and sequestration projects in the US, Vice President Bret Estep said in an interview.

The portfolio includes three previously announced projects that are highly developed along with seven others that have not been publicly disclosed, Estep added. Tenaska is focused on the transport and storage aspects of the CCS value chain.

“Our base facility is 5 million metric tons per year of storage capacity, and then the necessary pipeline infrastructure to bring those emissions in,” he said.

The base facility design will cost approximately $500m to build, but varies depending on the land position, site geology, and required pipeline miles, Estep said.

“For us, as we plan, I generally use a big rule of thumb to say these are around $500m overnight cost projects,” he said. “Just the storage facility itself, you might be in the $250m to $400m range. And then in really difficult places where there are a lot of pipeline miles, and those are expensive pipeline miles, it might be another $200m or $300m of just pipe.”

Estep says that Tenaska, as a private company, has flexibility on the eventual financing structure for projects, but that project financing is an option. He said the company has held discussions with potential financial advisors but declined to comment further.

Tenaska’s three announced projects are the Longleaf CCS Hub in Mobile, Alabama; the Pineywoods CCS Hub in Houston; and the Tri-State CCS Hub in West Virginia, Ohio, and Pennsylvania.

According to Estep, additional projects are going forward in Corpus Christi, New Orleans/Baton Rouge, and Central Florida. Further inland, Tenaska has two projects in Dallas, another in Oklahoma and another in Indiana.

Finding emitters

The projects “are not all easy – there’s a lot of competition out there,” Estep said. “In some places like let’s say Houston, there are a lot of other folks around, but there’s also a lot of emissions around. So I think there’s room for many people to be successful here.”

In other places like Mobile, Alabama or the Tri-State project, which are harder to develop, Tenaska is the only CCS developer, he added. 

As an example, the West Virginia project will likely be more costly to develop, given the suboptimal geology of the region. Still, the project benefits from a $69m DOE grant to support geologic characterization and permitting for the site.

For its CCS business, Tenaska makes money through what Estep calls a “plain vanilla” version of transport and storage: the take-or-pay contract.

“The emitter installs the capture equipment, they’re the taxpayer of record – they have whatever commodity uplift or green premium they can get on their product,” he said. “And they simply need someone to transport and store that CO2 long term really to qualify for that 45Q” tax credit.

For the Longleaf CCS project in Mobile, Estep places potential customers into four quadrants. The first is existing emitters like steelmakers, power plants, gas processing and pharmaceutical companies. “There’s less project-on-project risk in that way.”

The second is blue molecules. “There’s a growing blue molecule effort in that part of the world,” he said. Quadrant three is combined cycle with capture (though Tenaska is not pursuing a combined cycle for Longleaf) and quadrant four is direct air capture.

Tenaska is a participant in the Southeast DAC Hub, led by Southern States Energy Board, which received a grant of over $10m from the DOE.

“We see many emitters across industries from gas processing to cement, steel, power gen, you name it,” Estep said. “They want to do their own capture, or they want to deal straight with a capture technology, an EPC, or a standalone capture-as-a-service provider. And then what they really want is someone to come to their fence line and take the CO2 and store it long term, durably, safely,” he added. “That’s what we do.”

‘Intercept problem’

Tenaska is still about a year away from beginning to order long lead time items like specialized metallurgy or pipe, but will begin putting in orders once it has more visibility on matching up its development timeline with that of its customers.

Early on, Estep and his teams were sprinting to acquire land positions and submit permits, including some Class VI permits from the EPA, which are under review. But “the script almost totally flips” at that point, because under Tenaska’s hub and spoke model, “we want to be optimized for customers,” he said.

The firm looks at permitting timelines and the earliest likelihood of construction and injection versus when the emitter will likely take FID and begin capturing, “which we call the intercept problem,” Estep said.

Tenaska is the 100% owner of the projects at this point, and Estep believes they have put together a unique portfolio, “in that it’s diversified by customer, it’s diversified by EPA region, it’s diversified by geology and state.”

Estep added: “These kind of assets where there’s geology and storage, they can go the power gen route, they can go the hard-to-decarbonize route, cement and steel, they can go the new power gen route that’s advanced, they can go direct air capture, they can go to the molecule.”

“It’s a really interesting set of infrastructure projects that we are very bullish on for that reason.”

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Cement hills
exclusive

Ammonia-to-industrial heat provider raising early-stage capital

An early-stage technology provider targeting clients in hard-to-abate industries is engaging investors and financial advisors to raise a seed round, with sites on a Series A in 2025.

Captain Energy, a Houston-based provider of ammonia-to-industrial heat technology, is seeking strategic investors for an early-stage seed round with plans for an eventual Series A, co-founder and interim-CEO Kirk Coburn said in an interview.

The company is developing a single-step process that can create industrial heat from cracked ammonia up to 700 degrees Celsius with zero NOX emissions, with hydrogen as a byproduct, Coburn said. The process uses a ceramic-based tubular solid oxide fuel cell that Captain manufactures in Dundee, Scotland.

“The results from the testing are that we’re 85% efficient,” Coburn said.

He likened the company to Amogy, but serving steel, cement and chemicals instead of transportation. Getting the kind of high-quality heat those industries need in a clean way can only come from a few sources, he noted.
“Ammonia is one of the greatest ways to do it if you can crack it efficiently like we can,” he said.
Past lab

The company is “past the lab stage” and needs to develop a pilot product to showcase to customers, Coburn said. About $5m will get the company to a 100-kilogram-per-day product, up from 25 kilograms now.

“That’s not, probably, big enough for most customers, but we can stack them,” Coburn said. “At this point we need to demonstrate commercially the product… after showcasing it we want to make larger units.”

Captain is owned by three co-founders, including Coburn. They have an 18-month line of site on a “much larger” Series A, Coburn said.

Strategic investors that would be end users of the technology are of interest to the company, particularly in Asian and European markets.

“We’re not getting in the game of making ammonia,” Coburn said. “We have to buy green ammonia.”

The company’s model is at “grid-parity” in Europe now, Coburn said, pointing to Germany in particular.

“We think we’re almost at subsidy-free pricing,” he said.

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