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CF Industries to permanently shut down UK ammonia plant

CF said it would be cheaper to import ammonia due to high natural gas prices in the UK, as well as the impact of carbon costs.

CF Fertilisers UK Limited, a subsidiary of CF Industries Holdings, Inc., today announced a proposal to permanently close the ammonia plant at its Billingham Complex in order to secure the long-term sustainability of its business in the United Kingdom (U.K.) and more efficiently serve its customers in the country.

The company said Tuesday it intends to continue to produce ammonium nitrate (AN) fertiliser and nitric acid at the Billingham site using imported ammonia, as it has for the last 10 months following its decision to temporarily idle the plant in August 2022.

CF Fertilisers UK has made this proposal due to its forecast that producing ammonia at Billingham will not be cost-competitive for the long-term compared to importing ammonia due primarily to projected high natural gas prices in the United Kingdom relative to other regions and the impact of carbon costs. Additionally, shutdowns in recent years of industrial customers’ U.K. operations that had consumed significant ammonia volumes for their businesses have created a supply-demand imbalance for ammonia production at the Billingham Complex. The Company believes that ample global availability of ammonia for import, including from CF Industries’ North American production network, will enable more cost-competitive and efficient production and sales of ammonium nitrate fertiliser and nitric acid for its U.K. agriculture and chemicals customers moving forward.

The Company’s proposal to permanently close the ammonia plant at its Billingham Complex could result in up to 38 redundancies at the site, in relation to which it will be entering into the required collective redundancy consultation process with its recognised union, Unite, and elected employee representatives. The Company anticipates that some of the proposed redundancies might be avoided by redeployment opportunities.

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Iberdrola acquires 100% of Avangrid

Iberdrola, which already owned approximately 81.6% of Avangrid, acquired the remaining 18.4% of shares at $35.75 per share.

Iberdrola has today signed an agreement to acquire the 18.4% minority stake in its US subsidiary Avangrid that it previously did not own, according to a news release.

The Board of Directors of Avangrid has approved the transaction, following the recommendation of a committee made up entirely of independent directors that has been delegated the authority to oversee this operation (Special Committee).

Iberdrola will acquire the additional capital for $35.75 dollars per share, according to the company’s filing with the National Securities Market Commission (CNMV). This price represents an improvement over Iberdrola’s original proposal ($34.25 per share). Iberdrola previously owned approximately 81.6% of the U.S. company.

This price represents an investment of $2.551 billion for Iberdrola – about €2.348 billion (at a 1.0866 EUR/USD exchange rate). Following the closing of the transaction, a request will be made to delist Avangrid shares from the New York Stock Exchange.

The agreement has had the unanimous favourable vote of the members of the Boards of Directors of both Avangrid and Iberdrola.

The objective of this transaction is to increase exposure to the networks business in the United States at a key moment for Iberdrola, which wants to grow in markets with strong credit ratings and in regulated businesses such as networks.

The transaction is conditional on requisite shareholder approval and approval from various regulators, such as the Federal Energy Regulatory Commission and the state regulatory commissions of New York and Maine.

Headquartered in Connecticut, Avangrid currently has $44 billion in assets and operations in 24 US States. Its main businesses are two: networks and renewable energy. Through its networks business, Avangrid owns and operates eight electric and natural gas companies, serving more than 3.3 million customers in New York and New England. Through its renewable energy business, Avangrid owns and operates a portfolio of renewable energy generation facilities throughout the United States. Currently, the company has 8,000 employees.

In 2023, the company obtained an adjusted gross operating profit (EBITDA) of $2.43 billion.

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EverWind purchases three wind farms to power H2 and ammonia plant

The Canadian developer has been looking to finance its Point Tupper ammonia production and export facility near Halifax.

EverWind Fuels has purchased three wind farm projects in Nova Scotia to power Phase 1 of its green hydrogen and ammonia project, according to a news release.

The Hydrogen Source reported in April that the Canadian renewable fuels developer was preparing to launch a process to raise an estimated $800m in debt for its Point Tupper ammonia production and export facility near Halifax.

The Windy Ridge, Bear Lake and Kmtnuk wind farms represent approximately 530 MW. Membertou is a majority owner in the later two projects. The projects will be developed in partnership with Renewable Energy Systems (RES) and Black & Veatch.

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Cresta invests in alternative energy fueling station developer and operator

Cresta’s investment in Ocean Pacific will allow it to expand its capabilities and begin to commercialize and operate its own fueling stations.

Cresta Fund Management LLC (Cresta), a private equity firm that invests in low-carbon molecule infrastructure and solutions, today announced it has made a controlling investment in Ocean Pacific (OP), a developer of compressed natural gas (CNG) and alternative energy fueling stations.

OP has historically provided engineering, design and construction services to third-party CNG station operators and, with Cresta’s investment, will expand its capabilities and begin to commercialize and operate their own fueling stations to accelerate the decarbonization of the transportation industry, according to a news release.

“Our investment in Ocean Pacific aligns perfectly with our strategy to seek opportunities to build low-carbon molecule infrastructure that provides a solution for the energy transition,” said Chris Rozzell, Managing Partner at Cresta. “OP’s leadership in the CNG market, combined with our capital and both operational and development expertise, will significantly enhance the availability of clean fuel alternatives.”

Based in California, the OP management team has a 15-plus-year history of designing over 400 CNG stations with blue-chip partners and maintains a vast network within the trucking and transportation industry. Building on these relationships, OP will develop solutions around companies’ decarbonization goals and the fuel needs of trucking fleets. CNG is an economic and readily available clean alternative, lower-emission fuel for the trucking industry. To further decarbonize, renewable natural gas (RNG) can be used as the fuel for CNG-fueled motors, providing significant lifecycle emission reductions for transportation fleets.

“We are thrilled to partner with Cresta,” commented Timothy Nelligan, CEO of Ocean Pacific. “This investment will not only provide the financial resources needed to accelerate our growth but also bring valuable strategic insights from a team that deeply understands the renewable fuel landscape. Together, we will make significant strides in expanding our RNG and hydrogen infrastructure, providing cleaner, affordable fuel options to our customers.”

The investment supports the growing demand for alternative, clean fuel options and reiterates the increasing recognition of the importance of alternative fuels in the energy transition.

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Inside Intersect Power’s green hydrogen plans

California-based renewable energy developer Intersect Power anticipates huge capital needs for a quartet of regional energy complexes co-locating wind and solar with green hydrogen production in the Texas Gulf Coast, California and the American West.

Intersect Power, a solar developer that completed a $750m capital raise last year, is developing four large-scale green hydrogen projects that could eventually be spun off into a separate company, CEO Sheldon Kimber said in an interview.

Four regional complexes of 1 GW or more, co-located with renewables, are in development, he said. The first phases of those, totaling several hundred megawatts, will come online between 2026 and 2028.

Initial offtake markets include transportation, sustainable aviation fuel, and hydrogen for industrial use, Kimber said. Ultimately Intersect is aiming to serve ammonia exporters in the US Gulf Coast, particularly those exporting to Japan, Kimber said, adding that the company could contract with ammonia producers. He recently wrapped up a nine-day, fact-finding trip to Japan to better understand what he believes will be the end market for Intersect’s green ammonia.

“If you don’t know who your customer’s customer is, you’re going to get a bad deal,” Kimber said.

Intersects projects under development involve behind-the-meter electrolysis, co-located with Intersect’s wind and solar generation plants. In 2021 the company signed an MOU with electrolyzer manufacturer Electric Hydrogen. The contract is for 3 GW.

Intersect controls the land and is in the process of permitting the four projects, located in Texas, California and another western US location that Kimber declined to name. The primary focus now is commercial development of the offtake and transportation, he said.

‘Boatload of equity’

Kimber said the company will be ready to announced details of the projects when they are ready to seek financing. He estimates that upwards of $12bn will need to be raised for the package of complexes.

“There’s going to be an enormous need for capital,” Kimber said. Debt will make up between 60% and 90% of the raising, along with “a boatload of equity,” he said. Existing investors will likely participate, but as the numbers get bigger new investors will be brought on board.

Intersect has worked with BofA Securities and Morgan Stanley on past capital raise processes, and also has strong relationships with MUFG and Santander.

Moving forward the company could have a broader need for advisory services and could lend knowledge of the sector in an advisory capacity itself, Kimber said.

“The scope and scale of what we’re doing is big enough and the innovative aspect of what we’re doing is advanced enough that I think we have a lot we can bring to these early-stage financings,” Kimber said. “I think we’re going to be a good partner for advisory shops.”

In the short term Intersect has sufficient equity from its investors and is capitalized for the next 18-to-24 months, Kimber said. Last summer the company announced a $750m raise from TPG Rise Climate, CAI Investments and Trilantic Energy Partners North America.

“People don’t want to pay ahead for the growth in fuels,” Kimber said, adding that reaching commercial milestones will build a compelling valuation.

Intersect could spin off its hydrogen developments to capitalize them apart from renewables, Kimber said.

“Every single company in this space is looking at that,” he said. “Do you independently finance your fuels business?”

Avoiding the hype

Right now the opportunity to participate in hydrogen is blurry because there is so much hype following passage of the IRA, Kimber said. Prospective investors should be focused on picking the right partners.

“What you’re seeing right now is everybody believing the best thing for them,” Kimber said, noting that his company has decided to keep relatively quiet about its activities in the clean fuels space to avoid getting caught up in hype. “The IRA happened, and every electrolyzer company raised their prices by fifty percent.”

Of those companies that have announced hydrogen projects in North America, Kimber said he believes only a handful will be successful. Those companies that have successfully developed renewables projects of more than 500 MW are good candidates, as are companies that have managed to keep a fluid supply chain with equipment secured for the next five years.

“That is a very short list,” he said.

Lenders on the debt side will want to start determining how projects will get financed, and which projects to finance, in the next 18 months, Kimber said.

Finding those who have been innovating on the front-end for years and not just jumped in recently is a good start, Kimber said.

“Hydrogen will happen, make no mistake,” Kimber said. He pointed to the recent European directive that 45% of hydrogen on the continent be green by 2030 and Japan’s upcoming directive to potential similar effect. Once good projects reach critical points in their development they will start to trade, probably in late 2024, he said.

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Exclusive: World Energy GH2 targeting early 2025 FID

World Energy GH2 is aiming to reach FID early next year – and advancing project financing discussions with a pair of advisors – on the $5bn phase 1 green ammonia development in Newfoundland and Labrador known as Project Nujio’qonik. We spoke to Managing Director and CEO Sean Leet in detail about the project.

World Energy GH2, the developer of a green ammonia export project in Newfoundland and Labrador, Canada, is aiming to reach FID in early 2025 on phase 1 of Project Nujio’qonik, Managing Director and CEO Sean Leet said in an interview.

Phase 1 of the project entails the construction of a 1 GW wind facility and 600 MW of electrolysis for an estimated cost of $5bn, Leet said. Once complete, the first phase of Project Nujio’qonik is expected to produce approximately 400,000 tonnes of green ammonia for export.

The developer is working with Green Giraffe and RBC Capital Markets to advance a project financing deal, the same advisors that assisted World Energy GH2 on a $95m loan from Export Development Canada, announced last week.

The debt-to-equity split for the $5bn capital raise is still being iterated as the company looks at financing options with the available government subsidies and potential support from export agencies, Leet said. The company has not yet lined up an arranger for debt financing and expects to make a decision on that role at a later date, he added.

A schedule update is in progress as part of the project’s FEED readiness assessment. This update, considering factors such as long lead item availability and offtaker delivery requirements, is a required step before the start of FEED and is expected to be released around April 15. 

The FEED readiness assessment, Leet said, “is a process that we’ve undertaken with some value engineering due to some learnings from the pre-FEED deliverables and some other aspects of just making sure we’re well prepared for FEED so we can execute flawlessly on that.”

Leet expects the FEED process will take between nine and 12 months, setting the developer up for an FID in early 2025. As part of a competitive bidding process, World Energy GH2 was awarded four different Crown land sites, each capable of producing 1 GW of wind power, allowing for additional phases up to 4 GW of renewables.

Newfoundland, the distant Canadian island where Project Nujio’qonik is located, has become a hotbed of green ammonia project activity due to its exceptional wind resource, with as many eight major projects springing up (see, and zoom, on map).

Investment outlook

The Canadian government has promulgated a clean hydrogen investment tax credit of up to 40% on certain expenses, available until 2035. And in its most recent budget, the government floated the idea of providing contracts for difference to help de-risk emission-reducing projects. 

Leet believes that the CfD arrangement, which will be administered by the Canada Growth Fund, will be tied to the Canada-Germany Hydrogen Alliance, an agreement that promotes clean hydrogen trade ties between the two nations. Canadian Prime Minister Justin Trudeau and German Chancellor Olaf Scholz signed the accord at World Energy GH2’s site in Stephenville, with the aim of shipping hydrogen or ammonia by 2025 – a timeline that looks increasingly stretched. And World Energy GH2 earlier this year became the first North American member of Germany’s Port of Wilhelmshaven's energy hub.

“Those details haven’t been announced yet but we’re hopeful that the CfD mechanism is there to work alongside the ITC,” Leet said.

Additional financing could come from more export credit agencies “in the countries you would expect” that would support local companies providing equipment to Project Nujio’qonik. “That will be a very likely piece of our financing arrangement.”

World Energy GH2 is in discussions with various offtakers, but will be able to engage in greater detail once the ITC and CfD subsidies are clarified, and once the project receives its environmental permit, Leets said. 

World Energy GH2 was set up as a standalone Canadian company with the sole purpose of executing on Project Nujio’qonik. It is owned by its founders along with SK ecoplant, the environment and energy arm of Korea’s SK Group, which took a 20% stake in the company – and also the project – for $50m.

Gene Gebolys, the founder and CEO of World Energy LLC, a provider of low-carbon fuels, is also a founder of Project Nujio’qonik. And John Risley, another partner of the Canadian project, is a co-owner of World Energy LLC.

Support from existing investors along with the Export Development Canada facility announced last week make the project entity well capitalized to move “expeditiously” through FEED to FID, Leet said.

Canada to Europe

World Energy GH2 is talking to the major ammonia players about a scale-up of import capacity on European shores.

Leet noted specifically that the Antwerp-Bruges port has plans to scale up to handle the increased amounts of ammonia imports, for use in the various industries located in Belgium and potentially on to Germany from there.

Three companies – Fluxys, Advario Stolthaven Antwerp, and Advario Gas Terminal – have said they are considering constructing an open-access ammonia import terminal at the port of Antwerp-Bruges. Air Liquide also said it will build an ammonia cracking facility there.

The Port of Wilhelmshaven, Germany, where World Energy GH2 is a member of the energy hub, has similar plans to scale up, with various companies evaluating ammonia import terminals and cracking facilities.

Meanwhile, Leet said the ammonia product that it ships to Europe, in addition to benefiting from Canadian subsidies and tax credits, will also comply with the EU’s RFNBO standards.

The project has existing grid and water connections already at the Port of Stephenville, since the hydrogen plant will be built on top of a former paper mill which consumed both water and electricity. 

“So we're fortunate to have that grid connection available to us and the power in the Newfoundland grid is well over 90% existing hydro,” Leet said. “So between that and our wind power, we will have no issue meeting the standard set by the EU for green hydrogen and it will be 100% RFNBO compliant.”

The company is working on regulatory certification with multiple bodies but has not finalized a provider.

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Denbury to transport CO2 for Louisiana blue methanol project

A subsidiary of Denbury Inc. will transport and store CO2 for a planned blue methanol plant in Lake Charles, Louisiana.

Denbury Carbon Solutions has executed a 20-year definitive agreement to provide CO2 transportation and storage services to Lake Charles Methanol in association with that company’s planned 3.6 MMPTA blue methanol project, according to a press release.

LCM’s facility will be located along the Calcasieu River near Lake Charles, Louisiana, approximately 10 miles from Denbury’s Green Pipeline.

The facility is designed to utilize Topsoe’s SynCORTM technology to convert natural gas into hydrogen which will be synthesized into methanol while incorporating carbon capture and sequestration.

The process is anticipated to deliver more than 500 million kilograms of hydrogen per year as a feedstock to produce the 3.6 MMTPA of blue methanol.

LCM is finalizing its major permits to begin construction. The project is expected to reach a Final Investment Decision in 2023 with first production anticipated in 2027.

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