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BlackRock’s Navigator CO2 pipeline files updated permit application

Facing local opposition, BlackRock’s $3.4bn Navigator CO2 pipeline has filed an updated permit application with the Illinois Commerce Commission.

BlackRock-backed Navigator CO2 Ventures has filed an updated permit application with the Illinois Commerce Commission.

The new proposal reflects an expanded scope of the carbon capture, utilization, and storage project, Heartland Greenway, and includes the addition of 42 miles of proposed pipeline that will connect to additional permanent storage locations in central Illinois.

The Navigator CO2 pipeline has faced pushback from residents and local authorities across its footprint. Proponents previously withdrew an application for eminent domain powers in Illinois after state regulators said the filing was incomplete. The company then announced it would reapply with an expanded route.

The project scope includes 21 carbon dioxide collection points – at midwestern biofuel plants – along with 1,350 miles of new pipeline and four booster stations across Illinois, Iowa, Minnesota, Nebraska, and South Dakota.

Project costs, including capture and sequestration facilities, are projected at approximately $3.4bn.

The proposed pipeline is contracted with industrial producers to capture, transport, and store up to 10 million metric tons of CO2 annually. When fully expanded, the system will be able to transport up to 15 MMT of CO2 annually, according to documentation. Construction of the project is expected to commence in 2Q24 pending receipt of regulatory approvals.

Equity funding for the project is primarily sourced from BlackRock’s Global Energy & Power Infrastructure Fund III, which has committed equity of $5.1bn.

Development capital cost is estimated at $245m, which includes detailed engineering, property survey work, and acquisition of real property interests for the pipeline system and the sequestration facilities to be utilized in the construction phase. The development phase of the project is funded through equity commitments from BlackRock, the Navigator management team, and other investors.

The construction phase of the project will be funded by incremental equity sourced from GEPIF III and other investors, along with a project financing facility sourced by a consortium of lenders. The project has commitments from GEPIF III and other investors for incremental equity required for the construction phase.

On or near the commercial operation date of the project, a long-term debt facility will be put in place to refinance the construction loans, according to the application.

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Trafigura takes majority stake in hydrogen subsidiary

Trafigura Group will increase its shareholding in H2 Energy Europe AG to become majority owners. The firm is developing a 1 GW green hydrogen facility in Denmark, among others.

Trafigura Group Pte has agreed with H2 Energy Holding AG founders to increase its shareholding in H2 Energy Europe AG to become majority owners, as development plans ramp up for large-scale green hydrogen production projects and mid- and downstream hydrogen supply and distribution infrastructure in Europe.

H2 Energy Holding AG’s founders retain a minority ownership and will continue to contribute their extensive knowledge and expertise to the company.

In addition, Trafigura retains its support for and minority equity interest in H2 Energy Holding AG, which will continue to focus on developing green hydrogen eco-systems and green hydrogen technologies, according to a news release.

Rolf Huber, Founder of H2 Energy remarked: “This is a welcome development that strategically positions both companies for future growth and investment. As we move forward, our primary objective is to fortify our green hydrogen eco-system, focusing on infrastructural engineering projects, the development of fuel cell applications, and the development and commercialization of key hydrogen equipment. Collaborating closely with Trafigura, we aim to leverage each other’s expertise to advance our shared goal of making green hydrogen a cornerstone of the energy system.”

Julien Rolland, Head of Strategic Projects and Investments for Trafigura said: “Today’s announcement allows H2 Energy Europe to focus on developing large-scale green hydrogen projects and distribution networks across Europe, while H2 Energy Holding AG will focus on its core business and technology development. Trafigura and H2 Energy Holding AG will continue to co-operate closely and benefit from each partner’s respective expertise.”

Plans to build a 1 GW green hydrogen facility in Esbjerg, Denmark are progressing, with COWI commissioned in June this year to conduct the front-end engineering design (FEED) for the production plant. A final investment decision is expected in 2024.

In South Wales, H2 Energy Europe has recently submitted a formal planning application to construct a 20 MW green hydrogen production facility within the port of Milford Haven in South Wales, with local company InSite Technical Services Ltd currently undertaking the FEED study. The project has reached the final negotiation stage for funding under the UK government’s Hydrogen Business Model and Net Zero Hydrogen Fund: Electrolytic Allocation Round 2022, with final projects expected to be announced this year. Subject to government support, the facility should be commissioned within two years, using domestic renewable energy to produce green hydrogen for shipping and road transport, as a chemical feedstock and to provide power for industrial use across the South Wales Industrial Cluster.

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US DOE awards $118m for sustainable biofuels projects

The US Department of Energy has awarded $118m in funding for 17 projects to accelerate the production of sustainable biofuels for transportation and manufacturing needs.

The US Department of Energy (DOE) has awarded $118m in funding for 17 projects to accelerate the production of sustainable biofuels for America’s transportation and manufacturing needs, according to a news release.

The selected projects, located at universities and private companies, will drive the domestic production of biofuels and bioproducts by advancing biorefinery development, from pre-pilot to demonstration, to create sustainable fuels that reduce emissions associated with fossil fuels, the release states.

Projects selected as part of this funding opportunity will contribute to meeting DOE’s goal to achieve cost-competitive biofuels and at least a 70% reduction in greenhouse gas (GHG) emissions by 2030.

Made from widely available domestic feedstocks and advanced refining technologies, energy-dense biofuels provide a pathway for low-carbon fuels that can lower greenhouse gas emissions throughout the transportation sector and accelerate the bioeconomy. Financing for novel biorefinery process systems can be a barrier to commercializing advanced biofuels, and this funding will reduce technological uncertainties and enable industry deployment.

The selected projects include pre-pilot, pilot, and demonstration projects that will scale-up existing biomass to fuel technologies that will eventually create millions of gallons of low-carbon fuel annually. By investing in these technologies, the projects will create good-paying jobs in rural and underserved communities in nine states. Plans submitted by the selected projects show intent to collaborate with local school districts to educate and train the bioenergy workforce of tomorrow.  Additionally, the funded projects align with renewable fuels goals in the first-ever U.S. National Blueprint for Transportation Decarbonization, a multi-agency framework for reducing emissions, creating a robust transportation workforce, and securing America’s energy independence. The projects also support the U.S. Sustainable Aviation Fuel Grand Challenge goal of enabling the production of three billion gallons of sustainable aviation fuel annually by 2030 and 35 billion gallons annually by 2050.

The 17 selected projects fall into four areas:

  1. Pre-Pilot Scale-Up of Integrated Biorefineries,
  2. Pilot Scale-Up of Integrated Biorefineries,
  3. Demonstration Scale-Up of Integrated Biorefineries, and
  4. Gen-1 Corn Ethanol Emission Reduction.

The selected projects are located in nine states and Washington, DC, and focus on technologies including anaerobic digestion, conversion of cellulosic sugars to SAF, catalytic biorefining, among others.

The following projects were selected:

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EPCC contract awarded for Australia green hydrogen plant

A consortium consisting Technip Energies and Monford Group has been awarded an EPCC contract to develop Project Yuri.

A consortium consisting Technip Energies and Monford Group has been awarded an Engineering, Procurement, Construction and Commissioning (EPCC) contract by Yuri Operations Pty Ltd, to develop Project Yuri Phase 0 – a green hydrogen plant in the Pilbara region of Western Australia.

Project Yuri, developed in partnership with Yara Clean Ammonia and ENGIE, includes a 10 MW electrolysis plant and an 18 MW solar photovoltaic (PV) farm with its 8 MW Battery Energy System (BESS) providing the necessary energy for the electrolysis. It will produce up to 640 tonnes of green hydrogen per annum for use in the existing Yara Pilbara Ammonia Plant to produce green ammonia.

Technip Energies is responsible for the overall project management and the electrolysis plant engineering, procurement, commissioning and start up, according to a news release. Monford Group is responsible for the overall project construction and the PV farm engineering, procurement, commissioning and start up.

The project has received grant funding from the Federal Government via ARENA, as part of the Advancing Renewables Program and from Western Australia State Government as a part of Western Australian Renewable Hydrogen Fund.

Mitsui & Co. Ltd. has agreed to acquire a 28% stake in Yuri Operations Pty Ltd subject to the satisfaction of certain conditions under its investment agreement.

The Yuri project plan has a multi-phase (Phase 0-I-II-III) roadmap, which aims to establish a new industry value chain, harvesting the abundant renewable power in Western Australia, to make renewable hydrogen and ammonia as feedstock for renewable chemical production, as well as renewable fuel for power generation and shipping, serving local and export markets (Asia and beyond).

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Exclusive: Wisconsin RNG portfolio for sale with large renewables portfolio

A major Canadian utility is auctioning off four Wisconsin RNG assets as part of a larger renewables selldown. The subsidiary at auction has previously indicated that it would take part in Northeastern US hydrogen development.

Algonquin Power & Utilities is selling a package of four renewable natural gas assets, totaling 532 mmbtu, in Wisconsin as part of a larger renewables auction, according to two sources familiar with the matter.

JP Morgan is advising on the process, codenamed Project Power, the sources said.

The process comprises mostly operational onshore wind (2,325 MW) and solar (670 MW), along with an 8 GW development pipeline across 10 power markets, according to a teaser seen by ReSource. The renewable assets are collectively known as Liberty under the Algonquin banner.

The pipeline includes 1,600 mmbtu of RNG. The operational RNG assets reached COD in 2022.

Algonquin did not respond to requests for comment. JP Morgan declined comment.

The Wisconsin assets are apparently the former Sandhill Advanced Biofuels projects, which were acquired by Algonquin in 2022.

When that acquisition was made, it was announced that Liberty had signed on as a “hydrogen ecosystem partner” in the multi-state Northeast Regional Clean Hydrogen Hub. That hub ultimately was not selected by the US department of Energy for hub funding.

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Exclusive: Waste-to-fuels developer preparing capital raise

A waste-to-fuels developer has lined up an advisor and is planning a capital raise for a project in West Texas, in what is expected to be the first of up to 20 similar fundraising efforts totaling $500m in external capital needs.

Recover, Inc., a Calgary-based waste-to-fuels project developer, is preparing to launch a capital raise for its first US-based projects in West Texas.

The company has lined up CIBC to assist with the capital raise while a large Canadian Crown Corporation is expected to sign on as a lending partner for the debt portion of the cap stack, CFO Shane Kozak said in an interview.

Kozak said he will need to raise $70m – $75m for the West Texas project, which will process waste from oil and gas drilling fluids and recover 800 barrels per day of low carbon intensity diesel fuel from 800 tons of waste.

Existing equity backers Azimuth Capital and BDC will participate in the capital raise, but the company is seeking additional project equity investors to take part in a 60% debt to 40% equity capital structure, Kozak said.

While the cost of the West Texas project is estimated at $55m, the company needs to raise approximately $70m to account for debt servicing and underwriting fees, he added.

Recover has mapped out a strategy to build 20 projects in oil and gas basins across the US, and estimates it will need to raise $500m in external capital over 10 years to fully develop those projects.

Project model

The company already operates a similar facility in Alberta that became operational in 2018, at a cost of CAD 20m and producing about half of what the West Texas project will produce.

“This has been commercially proven in Canada, and we’re going to a better market with a lot more drilling waste production” in the US, Kozak said.

The waste stream from oil and gas drilling contains large amounts of diesel fuel: a typical well will create 400 – 500 tons of waste, 30%-40% of which is recoverable low carbon intensity diesel, Kozak said.

In Texas, the drilling fluid waste often ends up in pits near drilling rigs or in industrial landfills, where it biodegrades over time and emits CO2 and methane into the atmosphere.

“We significantly reduce GHG emissions and create a fuel source that can be reused, and every barrel that we recover is a barrel of fuel that would otherwise have to come from a fossil fuel source,” he said.

Recent changes to Texas policy regarding oil and gas drilling waste could increase the availability of feedstock for the company. The Texas RailRoad Commission, which oversees the state’s oil and gas industry, is seeking to modernize disposal practices that would redirect waste from drilling pits to more centralized industrial landfills.

“The good thing for us is that, in the Permian Basin, about 70% – 80% of the wells use these pits, and our strategy is to build our facility directly on industrial landfills,” Kozak said.

Recover is working with a large landfill management company with operations across the US to develop its facilities, he added. The company does not pay for feedstock, given the synergistic relationship between Recover and the landfill management company.

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Exclusive: Renewable fuels firm hires advisor for topco raise

A renewable fuels firm with operations in California has hired a bulge bracket bank to raise project and platform capital for new developments in the Gulf Coast.

Oberon Fuels, a California-based renewable fuels developer, has hired Morgan Stanley for a topco and project capital raise to launch soon, CEO Rebecca Bordreaux said in an interview.

The company, backed by Suburban Propane, plans to reach COD on its next facility in the Gulf Coast in 2026, Boudreaux said. Late last year the company hired its first CFO Ann Anthony and COO Derek Winkel.

Oberon produces rDME at its Maverick Innovation Center in Brawley, California and recently established a partnership with DCC Fuels focused on Europe.

The location of the Gulf Coast facility is not public, Bordreaux said, though the company aims to reach FID on it this year. When operational it would produce 45,000 mtpy of methanol, or a comparative amount of rDME. Capex on the facility is in the range of $200m.

The company is shifting toward production of methanol as a shipping fuel, she said. New opportunities also include using DME as a renewable hydrogen carrier, as the fuel is easily transportable and compatible with many existing logistical networks.

Oberon is also preparing to issue $100m of municipal bonds from the state of Texas, Bordreaux said.

More than $50m has been raised by the company to date, with Suburban Propane being the largest investor and customer in California, Bordreaux said. The company has a third project in the pre-FEED phase.

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