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Exclusive: Houston ammonia terminal sale in final round at high valuations

The sale process for a 50% stake in Vopak Moda Houston is in the final round, with several potential suitors in the hunt at a lofty valuation.

The sponsors behind Vopak Moda Houston are evaluating final bids for a stake in the ammonia and hydrogen terminalling operator.

The sale process, led by Intrepid Financial Partners, reached the final round in recent weeks, with parties considering lofty valuations for a 50% stake sale, sources said.

Final bids were under discussion at valuation multiples of between 20x – 25x on EBITDA of $13m, the sources said, implying an enterprise value of between $260m – $325m.

Formed in 2016, Vopak Moda Houston is a 50/50 joint venture between Royal Vopak and Moda Midstream. Moda Midstream is a portfolio company of EnCap Flatrock Midstream.

Vopak, Moda Midstream, and Intrepid did not respond to requests for comment.

In 2021 the JV commissioned its deepwater dock at the Port of Houston. It has constructed storage and terminal infrastructure for industrial gas product lines, with the stated intention of becoming a premier hydrogen and low-carbon ammonia terminaling hub in the Gulf Coast.

While the $13m of EBITDA reflects current contracts at the hub, future expansion depends in part on the completion of a 1.1 MTPA blue ammonia plant proposed for the site by a consortium including Vopak Moda Houston, INPEX, and LSB Industries.

The production facility, which would also capture and sequester 1.6 million metric tons of CO2 annually, is currently in the pre-FEED phase. Executives from LSB recently said they expected to find offtake for the facility among Japanese and Korean power utilities.

Based on LSB’s feasibility study, the cost of the project would come in between $500m and $750m.  The pre-FEED phase will last until 2Q24 followed by a one-year FEED period that would finish in 2Q25.

Netherlands-based Vopak recently reached a deal to sell three Rotterdam chemical terminals to infrastructure investor Infracapital.

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SK Capital acquires Milestone Environmental

Milestone’s CCS subsidiary Milestone Carbon has several CCS projects under development and recently announced progress in its Midland Basin project.

SK Capital Partners and affiliates have completed the acquisition of Milestone Environmental Services from Amberjack Capital Partners, according to a news release.

Latham & Watkins LLP acted as legal counsel and Houlihan Lokey served as financial advisor to SK Capital. Committed debt financing was provided by Cerberus Business Finance. Goldman, Sachs & Company and White & Case acted as financial advisor and legal counsel, respectively, to Milestone.

SK Capital has taken a controlling stake in Milestone in partnership with President and CEO Gabriel Rio, who will continue to serve in that role and retain significant ownership in the company.

Rio founded Milestone in 2014. It is the largest independent provider of waste management services and an emerging provider of permanent carbon sequestration services to US energy and industrial sectors, the release states.

Headquartered in Houston, Milestone operates a network of waste management infrastructure that permanently sequesters energy waste. Milestone has sequestered more than 2 million tons of CO2e through its proprietary slurry injection process.

Milestone’s CCS subsidiary is Milestone Carbon, focused on serving industrial CO2 emitters by developing and operating injection sites. Milestone Carbon has several CCS projects under development and recently announced significant progress in its Midland Basin project.

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European Union gives 213m to Faurecia for clean mobility

Faurecia will develop lightweight carbon fiber gaseous hydrogen tanks as well as a tank to store hydrogen in cryogenic form.

Faurecia, a subsidiary of the French FORVIA Group, will receive EUR 213m from to develop lightweight carbon fiber gaseous hydrogen tanks as well as a tank to store hydrogen in cryogenic form, according to a news release.

The money is dedicated to Faurecia’s Historhy Next project. Faurecia’s plant in Allenjoie will produce over 100.000 tanks per year, start of production will be in 2024.

In addition, fuel cell supplier Symbio, a joint venture between Faurecia and Michelin, is also among the 10 projects supported by the French government in IPCEI (Important Project of Common European Interest), which has dedicated EUR 2.1bn to support the hydrogen industry in France.

A large-scale transformation project, Hymotive will accelerate the mass production of its latest-generation fuel cell systems in Saint-Fons.

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California Resources appoints CFO from Sempra Energy

CRC has appointed Nelly Molina as its new CFO. She most recently held senior finance positions at Sempra Energy.

California Resources Corporation, an independent energy and carbon management company committed to energy transition, today announced that Manuela (Nelly) Molina has been appointed as executive vice president and chief financial officer, effective May 8, according to a news release.

As previously announced, CRC’s prior CFO Francisco Leon was named President and Chief Executive Officer and a member of the Company’s Board of Directors as of April 28, 2023.

Molina is an energy executive with more than 25 years of corporate finance, capital markets and project financing experience and brings an extensive background in the development of energy infrastructure projects in the natural gas and power sectors. She joins CRC from Sempra Energy, where she held various senior finance leadership roles, including most recently as vice president of audit services and vice president of investor relations.

Earlier in her tenure at Sempra Energy, she served as CFO of Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova), a subsidiary of Sempra Energy, which was listed on the Mexican Stock Exchange until October 2021. During her time at IEnova, she completed over $10bn of financing initiatives, including the company’s initial public offering. Previously, Molina served in leadership roles with Kinder Morgan and the former El Paso Corporation in Mexico.

“I am thrilled to welcome Nelly to the CRC team,” said Francisco Leon, president and CEO of CRC. “She has a strong track record of driving growth and expertise in navigating today’s evolving energy industry. With her financial acumen and prior experience in disciplined planning, execution and compliance, I look forward to working together as we continue to advance on our strategic realignment of our business operations and structure and focus on driving cash flow generation, enhancing our financial flexibility and delivering value for our shareholders.”

Molina said, “I am honored to join CRC as its next CFO and build upon the Company’s strong financial foundation. This is a great organization with significant opportunities for sustainable future growth and value creation. As the Company carries on with its energy transition initiatives, I’m excited to work with Francisco and the rest of the team to expand on the carbon management business, safely produce and deliver low carbon intensity energy to the local communities where CRC operates and help California achieve its climate goals.”

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CO2-to-SAF firm in $100m capital raise

A New York-based CO2-to-SAF firm is raising about $100m in equity and debt.

Dimensional Energy, the CO2-to-SAF startup based in Ithaca, New York, is in the late stages of a roughly $100m equity and debt round led internally, according to a source familiar with the matter.

The company is down to a shortlist of potential investors with two or three weeks until targeted close, the source said.

Dimensional did not respond to a request for comment.

Proprietary reactor technology powered by renewables is the core of Dimension’s regenerative process. According to its website, the company can make 15 barrels of fuel from every 10 tons of carbon sources form the atmosphere and hydrogen derived form electrolysis.

In May, the company signed an offtake agreement for 5 million gallons per year with Boom Supersonic, which is seeking to build a supersonic airliner that will travel at speeds twice as fast as today’s commercial jets.

Dimensional started production at a pilot-scale COutilization plant in Tucson, Arizona last year.

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Former Denbury executive targeting growth through CCS at industrial emitters

Tracy Evans, a former COO of Denbury Resources, has launched a business unit aimed at offering carbon capture and sequestration services for existing industrial emitters.

CapturePoint, a Texas-based carbon capture and enhanced oil recovery specialist, is seeking to grow by offering carbon capture services to existing industrial emitters.

The company, started with an initial focus on enhanced oil recovery operations using CO2, has launched a subsidiary called CapturePoint Solutions to capitalize on growing demand for carbon capture services at industrial plants, CEO Tracy Evans said in an interview.

Evans, a former chief operating officer of Denbury Resources, has years of experience operating CO2 capture units, pipelines, and oil wells. “The only difference between EOR utilization and sequestration is going to the saline aquifers,” he said of the pivot.

The company’s primary focus is on existing emissions, Evans said, emphasizing the immediate opportunity over proposed plants that might take many years to build. He added that the company would target “pure” sources of CO2 versus diluted sources.

Evans brought in a JV equity partner for the CCS business, but declined to name them. He said the company is sufficiently capitalized for now but might need to raise additional equity as it signs up new projects in the next 12 to 16 months.

Tax equity and CCS

CapturePoint recently completed a tax equity deal for a CCS facility that has been operational since 2013, thanks to changes to provisions governing the use of 45Q for carbon capture that allowed existing plants to qualify if they capture over 500,000 tons of CO2.

The deal, at CVR Partners’ Coffeyville fertilizer plant, opened up an initial payment of $18m and includes installment payments, payable quarterly until March 31, 2030, totaling up to approximately $22m.

An ethanol facility where CapturePoint operates will also qualify for 45Q benefits because 80% or more of the carbon capture unit is being rebuilt, Evans said. The company was able to finance the new construction at the ethanol facility from cash flow out of its oil & gas operations.

Going forward, new projects installed at existing emitters will follow a project finance model, with equity, debt, and 45Q investors, Evans said. The company will use a financial advisor when the time is right, the executive noted, but said there’s more work to be done on sizing and costs before an advisor is lined up.

“The capture costs are similar for each site,” he said. “The pipeline distances to a sequestration site is what drives significant variation in total capital costs.”

Evans believes that tax credit increases in the Inflation Reduction Act – from $35 per ton to $60 per ton for CO2 used in EOR, and $50 per ton to $85 for CO2 sequestration – should help the CCS market evolve and lead to additional deals.

“There wasn’t much in it for the emitter at $35 and $50, to be honest,” he said, “whereas at $60 and $85 there’s something in it for the emitter.”

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Exclusive: Pan-Atlantic developer planning e-methanol project in West Texas

A clean fuels developer with projects on both sides of the Atlantic is pursuing an e-methanol project in West Texas with an estimated cost of between $800m – $900m.

Green fuels developer ETFuels is planning an e-methanol project in West Texas.

Following the blueprint of projects in development in Finland and Spain, ETFuels has leased land and the Lone Star State is in the early stages of determining the feasibility of the project, which would require between 300 MW – 500 MW of renewables, Director Patrick Woodson said.

Depending on the ultimate size of the project, it would cost between $800m – $900m and produce 80,000 to 120,000 tons per year of e-methanol on site, he said, which would then be trucked to end markets.

“We like the modularity of projects of that size,” he said, noting “more optionality to bring projects to market.”

Woodson, the former CEO and Chairman of E.ON Climate & Renewables, a renewables developer, said ETFuels would develop the renewables portion of the project internally.

The company is still exploring likely target markets for the e-fuels, but Woodson noted that they perceive robust demand for green methanol from the shipping industry.

“We understand the decarbonization challenges faced by the shipping industry are significant, with question marks over pricing and supply availability at scale, and we are addressing these head-on,” ETFuels CEO Lara Naqushbandi said in a news release last year.

ETFuels attracted financial backing last year from France-based SWEN Capital Partners, with Green Giraffe providing financial advisory services.

For its Spain project, the company is developing a 100,000 ton green methanol plant, including 420 MW of solar PV and 120 MW of onshore wind capacity powering 220 MW of electrolyzers.

It expects to take a final investment decision on the Spain project by 2025, with production anticipated for 2028, according to the company website.

ETFuels as a third project in development in Finland, powered by “relentless” Arctic winds.

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