Innovation, Project news, Regulatory

Corpus Christi green ammonia competitive globally: RMI

Providing green ammonia as a bunker fuel as well as for global exports out of Corpus Christi could significantly drive down delivered costs.

May 6, 2024

Green ammonia used as a bunker fuel from Corpus Christi would be competitive on a global scale largely thanks to the Inflation Reduction Act, according to a study from RMI, Global Maritime Forum, and the Zero-Emission Shipping Mission.

The report “Oceans of Opportunity: Supplying Green Methanol and Ammonia at Ports” provides an analysis of the strategic developments necessary for ports to adapt and become leaders in the supply of green methanol and ammonia.

Ports are being categorized into archetypes such as Importing Incumbents, Producing Incumbents, Future Exporters, and Bespoke Players. This classification helps in identifying the strategic actions these ports can take to align themselves with the emerging demand for green fuels.

Significant infrastructure investments are required for ports to facilitate the production, storage, and bunkering of green fuels like methanol and ammonia. This includes adapting existing facilities and building new ones tailored to handle these less conventional fuels.

According to the report, Singapore is classified as an importing incumbent, while the Port of Algeciras is a producing incumbent. The Port of Corpus Christi is identified as a future exporter; the Ports of Seattle and Tacoma are bespoke players; and the Port of Rotterdam is a bespoke player.

In the case of Corpus Christi, the region possesses excellent renewable energy resources, particularly wind and solar, which are critical for the cost-effective production of green hydrogen—an essential precursor for green ammonia.

The port area already has a strong industrial base with existing infrastructure suitable for large-scale energy projects, including pipelines and storage facilities. This existing infrastructure can be repurposed or adapted at lower costs compared to building new facilities from scratch.

The report also highlights the impact of the Inflation Reduction Act, which provides substantial tax credits and incentives for renewable energy projects. These incentives can significantly reduce the production costs of green hydrogen and, by extension, green ammonia.

Crucially, the report highlights the possibility to reduce the cost of green ammonia an additional 30% by “doubling up” and facilitating both ammonia exports and ammonia as a bunker fuel.

“Any ammonia storage and jetties will be able to ‘double up,’ facilitating both ammonia exports and bunkering,” the report reads. “Not only will this make investments in this infrastructure more feasible, but it also has the potential to significantly reduce the last-mile bunkering premium.”

The report continues, “If the full pipeline of ammonia export projects around the port is realized, this would reduce the delivered cost of ammonia bunkers by ~30% compared to if the infrastructure were developed solely for bunkering.”

The report shows that the delivered cost of green ammonia to the Port of Corpus Christi could drop as low as $850 per ton under the higher throughput scenario involving both exports and bunkering.

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M&A, Raising capital

Canadian H2 infra company receives CAD 217m equity investment

HTEC, the privately held British Columbia-based hydrogen infrastructure solutions provider, has received a CAD 217m investment from Chart Industries and I Squared Capital.

HTEC, the privately held British Columbia-based hydrogen infrastructure solutions provider, has received a CAD 217m investment from Chart Industries and I Squared Capital, according to a news release.

This investment expands Chart’s ownership of HTEC to 25 percent and provides ISQ a 35 percent holding; HTEC’s original shareholders and employees will retain a 40 percent ownership in the company. The majority of directors of HTEC remain independent of Chart and ISQ, and the Company will remain headquartered in British Columbia

Winston & Strawn and Stikeman Elliott served as legal advisors to Chart, while I Squared Capital used Stikeman Elliott, Kirkland & Ellis and Greenhill & Co. as financial advisor. Fort Capital Partners acted as financial advisor to HTEC on the transaction, and Blake, Cassels & Graydon as legal counsel.

This investment provides HTEC with significant capital to fund new green hydrogen production projects and to expand its hydrogen fueling station portfolio serving both the light-duty and heavy-duty market, the release states.

HTEC has 17 hydrogen fueling stations operating or in development in Canada and the United States today. The company also delivers engineering and design services and specialty products and solutions to customers around the world.

Chart is a global manufacturer of liquefaction and cryogenic equipment serving multiple applications in the energy and industrial gas end markets, including hydrogen. ISQ is an independent global infrastructure investment manager.

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September 8, 2021

Project finance, Project news, Raising capital

Avina unveils Midwest ethanol-to-SAF project

Avina revealed more details about a planned SAF project in the Midwest, saying that funding commitments for the project through FID have been secured.

Clean hydrogen developer Avina said this week it is pursuing plans for a sustainable aviation fuel (SAF) plant in the Midwest region set to commence operations in 2027.

The facility, engineered to produce 120 million gallons of SAF annually, will utilize alcohol-to-jet production technology pathway. The SAF produced will have significantly reduced life cycle carbon emissions compared to conventional jet fuel. The end product will be certified to meet ASTM D7566 standards, according to a news release.

Preliminary Front End Engineering Design (Pre-FEED) for the project is complete and FEED is expected to kick off in Q2 2024.

Funding commitments for the project through FID have been secured, and Avina is currently engaged in advanced discussions with various strategic and financial investors to fund the project at FID.

Avina is also pleased to announce that it has entered into long-term supply agreements with leading ethanol suppliers for a significant portion of the low carbon intensity (CI) ethanol feedstock volume requirement, a major milestone in moving the project forward. Substantial volumes of ethanol will be supplied by facilities with operational carbon capture and sequestration. Leveraging this low carbon intensity ethanol feedstock, the project is estimated to avoid around 840,000 metric tons of aviation-related carbon emissions annually. The project will leverage existing rail and pipeline infrastructure to ensure optimal delivery of end product into the Chicago O’Hare and other regional airports.

The US airline industry is experiencing a notable demand for SAF in response to commitments to utilize three billion gallons of SAF by 2030. Avina is proactively collaborating with airline customers and other stakeholders to play a key role in meeting this target.

“The strategic location, scale, and cost-effectiveness offer a significant advantage for our SAF project,” says Vishal Shah, CEO & Founder at Avina Clean Hydrogen. “Aviation sector accounts for 2% of global CO2 emissions. In recent years, emissions from this sector have been increasing at a faster rate compared to those from rail, road, or shipping. Sustainable Aviation Fuels are critical to decarbonizing the aviation sector and the Ethanol-to-Jet production pathway is the most immediate, cost-effective, and scalable option for aviation decarbonization. With the procurement of low CI ethanol from existing production facilities that have CO2 capture and sequestration, we are excited about the project’s potential to drive aviation industry’s decarbonization efforts forward.”

April 4, 2024

Innovation, Project news

Sumitomo and Hoegh Autoliners studying ammonia bunkering

The parties have signed an LOI to study the supply of clean ammonia as a bunker fuel at the ports of Singapore and Jacksonville, USA from 2027 onwards.

Sumitomo Corporation and Höegh Autoliners have signed a Letter of Intent to collaborate on the supply and delivery of clean ammonia as a next-generation sustainable maritime fuel for Höegh Autoliners’ upcoming Aurora Class PCTC vessels.

The twelve state-of-the-art vessels are set to become the largest and most eco-friendly car carriers ever built, with the capability to run on zero-carbon ammonia or carbon-neutral methanol, according to a news release.

Under the agreement, the parties will look into the supply of clean ammonia as a bunker fuel at the ports of Singapore and Jacksonville, USA from 2027 onwards.

Moving forward, the companies will embark on a comprehensive evaluation of the compatibility between the PCTC vessels and the ammonia bunkering facilities at the identified bunker ports. They endeavor to make necessary adjustments to specifications for both “shore-to-ship” and “ship-to-ship” bunkering operations and undertake safety assessments to establish standardized operational protocols and regulations in close coordination with pertinent government agencies.

December 6, 2023

Innovation, Project finance, Raising capital

Exclusive: Hydrogen adoption and production firm prepping capital raise

A decarbonization services provider is in development on multiple utility-owned hydrogen adoption projects in the Northeast, Texas and Georgia and is preparing to launch a capital raise in 3Q24.

Celadyne, a Chicago-based decarbonization and hydrogen solutions company, will launch a Series A this year as it continues its role in the development of several utility-owned hydrogen adoption projects in the US, founder and CEO Gary Ong told ReSource.

A $20m to $30m capital raise will likely launch in 3Q24, Ong said. The company is relying on existing investors from its recent seed round to advise, and the amount could change based on grants.

While the $4.5m seed round allowed the company to focus on transportation mobility, the Series A will be used to do more work on hydrogen production, so the company will be looking for strategics in oil and gas, renewable energy, and utilities.

DLA Piper is the company’s legal advisor, Ong said.

Celadyne has a contract signed with a utility in the Northeast for a small electrolysis demonstration and, following that, a multimillion-dollar project. Discussions on how to finance that latter project are underway.

Additional electrolysis projects in Texas and Georgia are in later discussions, while less mature deals are taking shape with a nuclear customer in Illinois and another project in Southern California, Ong said.

Fuel cell customers (typically OEMs that use hydrogen) to which Celadyne ships equipment are clustered mostly in Vancouver, Michigan and California.

Meanwhile, Celadyne has generated revenues from military contracts of about $1m, Ong said, a source of non-recurring revenue that has prodded the company to look for a fuel cell integration partner specific to the defense application.

‘Blocking hydrogen’

The company, founded in 2019, is focused on solving for the demand and supply issues for which the fledgling US hydrogen market is notorious. Thus, it is split-focused between hydrogen adoption and production.

Celadyne has developed a nanoparticle coating that can be applied to existing fuel cell and electrolyzer membranes.

On the heavy-duty side, such as diesel generators or back-up power, the company improves durability of engines between 3X and 5X, Ong said.

On the electrolysis side, the technology improves rote efficiency by 15%. In production, Celadyne is looking for pilot projects and verification studies.

“We’re very good at blocking hydrogen,” he said. “In a fuel cell or electrolyzer, when you have hydrogen on one side and oxygen on the other side, you need something to make sure the hydrogen never sees the oxygen,” noting that it improves safety, reduces side reaction chemistry and improves efficiency.

Hydrogen adoption now will lead to green proliferation later should the economics prove out, according to Ong. If not, blue hydrogen and other decarbonized sources will still pave the way to climate stability.

The only negative for that is the apparent cost-floor for blue hydrogen in fuel cell technologies, Ong said, as carbon capture can only be so cost efficient.

“So, if the price floor is say, $3.25 or $3.50 per kg, it doesn’t mean that you cannot use it for things like transportation, it just means that it might be hard to use it for things like shipping, where the fuel just has to be cheaper,” Ong said.

Three companies

Celadyne is split into three focus applications: defense, materials, and production. If only one of those wings works, Ong said he could see selling to a strategic at some point.

“If any of those things work out, we ought to become a billion-dollar company,” he said.

If all three work out, Ong will likely seek to do an IPO.

An acquisition could be driven by an acquiror that can help Celadyne commercialize its products faster, he said.

April 11, 2024

exclusive

Project finance, Raising capital

Storage solutions firm in the market for strategic capital

An early-stage provider of hydrogen storage technology has hired a UK-based financial advisor to raise capital for a pilot plant.

Hydrogen carrier technology firm H2Fuel is seeking to raise approximately $25m to build a pilot project, according to sources familiar with the company’s plans.

The Dutch-based company has mandated a UK-based financial advisor to engage potential investors, with capital needs in the $12.5m range of a $25m project cost, the sources added.

In an interview, H2Fuel CEO Peter Huisman said the firm is “location agnostic” in looking for a site for a pilot project, but would prefer the US. Europe and India are also possibilities.

“We are early stage, in our view,” Huisman said. “[An investor will] need to have a long-term view of the market.”

Huisman declined to say which bank his company has hired but referred to it as a “top five” institution.

H2Fuel’s process combines hydrogen to salt, forming an energy-dense solid compound that can be transported and stored in dry conditions without complex requirements. A patented energy release process requires no extra energy, Huisman said.

The company has talked with some large strategics but has been told they are too early, Huisman said. The company views the near-term capital opportunities as one for pension funds or a venture capital.

May 25, 2023

exclusive

Project finance, Project news, Raising capital

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.

April 3, 2023