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Exclusive: Clean iron startup preparing Series B

A clean iron manufacturing company with backing from Bill Gates is preparing to raise a Series B and is scouting a location for its first industrial-scale factory in the US.

Electra, the Colorado-based clean iron firm seeking to supply the fledgling global green steel market, is preparing to raise a Series B and may look to hire a US financial advisor, CEO Sandeep Nijhawan told ReSource.

Early discussions on the raise have already started, Nijhawan said. Project equity, JV formation and other financial structures and partnerships are on the table.

Electra completed an $85m Series A last year with participation from Breakthrough Energy, and announced the commissioning of a pilot plant in Boulder, Colorado this week. The company manufactures “pure green iron” via a patented electrochemical system.

“Cost of energy is key here,” Nijhawan said, adding that the process leaves “a high degree of freedom on what ores” can be input, with alumina, bauxite and red mud ultimately co-produced.

Electra is in discussions with power developers and utilities to provide power to its projects, envisioning ironmaking hubs (including grid-connected projects) close to cheap power that is then ship to end users, he said. Contracts with steelmakers and OEMs typically last seven years.

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Mitsubishi Corp. planning $1bn fund for decarbonization startups

The Japan-based fund will invest primarily in European and US startups.

Japanese trading house Mitsubishi Corp., together with MUFG bank and others, will launch a $1bn decarbonization fund, Nikkei reported today.

The fund will invest a total of $1bn in startup companies with promising technologies in areas such as floating offshore wind turbines and sustainable aviation fuel, according to the report.

The fund will invest in European and US startups.

Mitsubishi will invest several hundred million dollars in the fund, called Marunouchi Climate Tech Growth Fund, while Mitsubishi Heavy Industries and other investors will be invited to take part as well. MUFG and Pavilion Private Equity will also invest in the fund.

The size of fund will grow to $1 billion by April 2024, with individual investments ranging between $20m and $100m, the report says.

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Montana Renewables completes startup, gets bridge loan from I Squared

Calumet Specialty Products Partners said this week that its Montana Renewables subsidiary completed the startup of its sustainable aviation fuel and pretreatment units.

Calumet Specialty Products Partners, L.P. said this week that its its Montana Renewables subsidiary completed the startup of its sustainable aviation fuel and pretreatment units.

Calumet and its SAF off-taker plan to hold a ribbon cutting ceremony on May 10, 2023 to recognize this important milestone.

“We are pleased to report that our leading Sustainable Aviation Fuel, Renewable Diesel, and Renewable Hydrogen platform is fully complete and operating,” said Bruce Fleming, CEO of Montana Renewables. “As we ramp up our pre-treater and draw down existing safety stock of clean feed, we reconfirm go-forward EBITDA guidance of $1.25 to $1.45 per gallon based on local sourcing of untreated feedstocks.”

On April 19, MRL closed a $75 million bridge loan with I Squared Capital. The bridge loan bears a variable rate of interest at SOFR plus 6.0 to 7.3% per annum and we have the flexibility to prepay 50% of principal under the bridge loan from free cash flow by the end of 2024. “Our capital markets strategy remains unchanged,” said Fleming. “This transaction provides strategic optionality as we continue to build North America’s largest SAF business.”

Calumet’s CEO Todd Borgmann added “Following a year in which we’ve demonstrated the power of Calumet’s legacy Specialty business, we can now add the full earnings power of Montana Renewables. Over the past two years, our Montana Renewables team has quickly launched a leading renewables platform and created a first mover advantage in SAF. This major accomplishment is the most recent step in our transformational plan to unlock value for Calumet’s unitholders.”

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Mitsubishi Hydrogen Infrastructure appoints president and CEO

Michael Ducker has been appointed president and CEO of Mitsubishi Hydrogen Infrastructure.

Michael Ducker has been appointed president and CEO of Mitsubishi Hydrogen Infrastructure.

Ducker was previously senior vice president and head of hydrogen infrastructure at the firm, a post he held since 2022. He has also been chief operating officer of the ACES Delta hydrogen project in Utah since 2020, according to his LinkedIn profile. He joined Mitsubishi in 2012.

Mitsubishi Hydrogen Infrastructure is a wholly owned subsidiary of Mitsubishi Power Americas and a Group Company of Mitsubishi Heavy Industries (MHI), with the aim of providing high-quality solutions and projects to customers and partners as an established business in the clean hydrogen market while simultaneously enabling greater agility to keep pace with a rapidly evolving and dynamic hydrogen market.

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US hydrogen and LNG developer raising capital

A Texas-based project developer is conducting a development capital raise for a flagship LNG and green hydrogen project in the Northeast.

New Energy Development Company, a Katy, Texas-based developer with offices in Boston, Texas, is raising between $5m and $8m for an LNG liquefaction, storage and re-gasification facility with additional green hydrogen production and storage, Partner Scott Shields said in an interview.

The company is not using a financial advisor, Shields said, noting that a larger second round capital raise will likely start near the beginning of 2024.

New Energy has secured a brownfield site for a peak-shaving LNG facility in New England with 2 billion cubic feet of storage capacity and 50 MW of solar pv, Shields said. Also planned is an expandable 40 MW PEM electrolyzer line.

He declined to name the state in which the project is located, adding that the company is trying to put a strong support system and marketing plan in place before the location is made public.

The proceeds of the capital raise will go in part to hiring local lawyers and engineering and design work (pre-FEED and FEED), through to FID, Shields said. The project will be built in two phases, Phase 1 being the LNG component and Phase 2 focusing on green hydrogen.

The LNG facility will be the offtaker for the hydrogen, which will run the plant when the solar is insufficient. Through an open season process New Energy has identified five investment grade offtakers for the LNG.

Ramping capex

“We’ve been self-funding up until now,” Shields said of New Energy, which has also put capital and development resources into half-a-dozen other projects around the country.

It’s time for a ramp up in capital expenditures and New Energy is in discussions with strategic and private equity providers, Shields said, noting that the company would prefer the former. Discussions include options to fund just the flagship project, as well as platform equity.

Shields noted that he has investment banking experience and that New Energy Managing Partner Alexander “Hap” Ellis serves as chairman of Old Westbury Funds and the George and Barbara Bush Foundation.

New Energy has partnered with McDermott International to develop patented GreenER hydrogen facilities, a modular, expandable hydrogen facility that can produce 24,000 kg per day (2,760 MMBtu) of renewable hydrogen. The companies in 2021 completed engineering deliverables for multiple designs which are marketed as ideal for grid-scale blending with natural gas pipelines, blending for existing or new power generating facilities and storage injection into salt caverns and above ground storage tanks.

The company has also combined GreenER LNG and hydrogen production and storage plants into an integrated energy hub, capable of producing an additional 200,000 MMBtu of LNG.

New Energy recently hired Chico DaFonte, formerly a vice president at Liberty Utilities, a subsidiary of Algonquin Power, as executive vice president working on LNG and hydrogen projects.

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Low-carbon crude refinery developer lining up project cap stack

The developer of a low-carbon crude refinery is in talks with banks and strategics to line up project financing for a $5.5bn project in Oklahoma.

Texas-based Southern Rock Energy Partners is holding discussions with banks and potential strategic investors with the aim of shaping a $5.5bn capital stack to build a low-carbon crude refinery in Cushing, Oklahoma.

The project, a first-of-its-kind 250,000 barrel-per-day crude refinery, would make it the first crude facility of that size built in the United States in several decades.

The company is evaluating a project finance route with a debt and equity structure for the project, and has held talks with several major investment banks as well as “industry-leading” strategics in midstream, industrial gas, and electricity generation, Southern Rock Managing Partner Steven Ward said in an interview.

In support of the refinery, the city of Cushing and the Cushing Economic Development Foundation approved $75m in tax-exempt private activity bonds, Ward noted. He added that the company could also tap industrial revenue bonds as well as PACE equity financing.

Seed capital for project development has so far come from strategic partners, some of which are operational partners, Ward said. He declined to comment further on the capital raise, noting that engagement letters have yet to be signed.

Engineering firm KBR is conducting a feasibility study for the Cushing project, and the company is moving through land acquisition, air permit preparation, and EPC selection, Ward said.

While most crude refineries consume natural gas, off-gasses, and ambient air, Southern Rock’s proposed refinery would use oxygen along with blue hydrogen produced from the refining off-gasses and green hydrogen from electrolysis. The process would eliminate 95% of greenhouse gas emissions at the proposed refinery.

“Our furnaces and our process heating units are fed 100% hydrogen and oxygen,” Ward said, noting that this type of system does not currently exist in the market. The company is expanding on technology it licenses from Great Southern Flameless, he said.

The size of the refinery would make it the largest to be built in the US since Marathon Petroleum built a 200,000 barrels-per-day facility in 1976.

Certain other low-carbon crude projects have been in the market for several years. Meridian Energy has been seeking to build cleaner crude refineries in North Dakota. Raven Petroleum ran up against environmental concerns while seeking to build a clean refinery in Texas. And MMEX is aiming to build an “ultra clean” crude refinery in West Texas.

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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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