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Exclusive: Modular green ammonia firm launches capital raise

A modular green ammonia firm has hired a boutique investment bank and has launched a roughly $150m capital raise.

Talus Renewables, a developer of modular green ammonia projects, has hired a boutique investment bank and has launched a capital raise.

The company has hired GLC Advisors as sellside advisor, according to sources familiar with the matter, and launched the capital raise this month, which seeks to raise $50m of equity and an additional $100m of financing.

CEO Hiro Iwanaga told ReSource last year that the company was gearing up for a Series B capital raise, including initiating talks with potential advisors.

Talus offers containerized systems that produce green ammonia from power, water, and air, in the form of the TalusOne (up to 1.4 tonnes of green ammonia daily) and talusTen (up to 20 tonnes per day).

The company delivered its first system to Kenya Nut Company, a multinational agricultural firm in east Africa, under a 15-year fixed-price ammonia offtake agreement, Iwanaga said in the interview. As of November, the company had a pipeline of approximately $1bn of indicated interest for ammonia from potential customers, which included large farms and mining companies in several global jurisdictions, including the US.

It recently completed a $22m Series A fundraising that would fund the delivery of the next three to four systems before the end of the year, Iwanaga said, stretching Talus’ footprint to Europe and the US, with one more system heading to South America.

The company is deploying to large farms and mining companies, where ammonia is used as a blasting agent. In the US, the company has partnered with agribusiness Wilbur-Ellis and farmer-owned cooperative Landus, Iwanaga said.

Iwanaga and GLC did not respond to requests for comment about the recently launched capital raise.

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Mining giant Vale partners with Wabtec on alternative fuels study

The deal includes an order for three of Wabtec’s FLXdrive battery locomotives and a collaboration to test ammonia as a potential clean, alternative fuel to replace diesel.

Vale has agreed a partnership with Wabtec Corporation to advance the decarbonization of the company’s rail operations.

The deal includes an order for three of Wabtec’s FLXdrive battery locomotives and a collaboration to test ammonia as a potential clean, alternative fuel to replace diesel.

The three 100% battery powered FLXdrive locomotives will be used on the Carajás Railroad (EFC), which runs the world’s largest iron ore train consisting of 330 railcars transporting 45,000 tons. Today, three to four diesel locomotives pull the train. Once delivered, the FLXdrives will join the diesel locomotives to form Brazil’s first hybrid consist pulling the train uphill for 140 kilometers in Açailândia, in the state of Maranhão, where fuel consumption is the highest. The FLXdrives will replace the two diesel locomotives, known as “dynamic helpers”, that are used to pull the train uphill today.

Wabtec will build the FLXdrive locomotives at its plant in Contagem (state of Minas Gerais). The locomotives’ delivery is forecast for 2026.

“Initially, we are maximizing energy efficiency, replacing the diesel locomotives in the dynamic helper with battery ones, but the idea is that, in the future, the other locomotives on the train can be fueled by ammonia. This way, we would have a clean operation at EFC,” explains Vale’s Director of Energy, Ludmila Nascimento. “This agreement is the first of many that we are seeking in order to accelerate the decarbonization of our railway operation,” she adds.

Vale and Wabtec will work together on a study to use ammonia as a clean alternative fuel, which does not emit CO2. The study will initially be carried out as lab tests to validate performance, emission reductions, and feasibility. Among the advantages of ammonia is the fact that it allows the locomotive a longer range than other carbon-free fuels. In addition, ammonia has a high-octane rating and an established large-scale distribution infrastructure. The two companies will carry out the study in a laboratory over the next two years.

The FLXdrive locomotive’s energy management system recharges the batteries along the route as the train brakes. “It’s what we call regenerative energy produced by dynamic braking. Today, that energy is lost when a traditional locomotive brakes. In the downhill sections, we will be able to recharge the batteries, without having to stop the train’s operation,” said Alexandre Silva, manager of Vale’s Powershift Program. Vale introduced the Powershift Program to study alternative technologies to replace fossil fuels with clean sources in the company’s operations.

The FLXdrive locomotives are estimated to save 25 million litres of diesel per year, considering the consumption of all the railway’s trains that use the dynamic helper. This savings would reduce carbon emissions by approximately 63,000 tons, the equivalent emissions of around 14,000 passenger cars per year.

“Technological advances in battery power and alternative fuels are accelerating the decarbonization journey for railroads,” said Danilo Miyasato, president and general manager of Wabtec for Latin America. “Vale’s innovative approach to adopting alternative fuels for its locomotives will benefit its customers, shareholders, and communities. The FLXdrive provides Vale productivity, safety, fuel economy, and emission reductions for its rail network.”

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GE and Shell partner on hydrogen fueling for gas turbines

The focus of the agreement is on hydrogen solutions for B&E class gas turbines used in LNG and power generation applications.

GE Gas Power and Shell Global Solutions have signed an agreement under which GE will develop use of 100% hydrogen as a fuel for gas turbines, according to a press release.

Focus will be on hydrogen solutions for B&E class gas turbines used in LNG and power generation applications.

“Shell’s Blue Hydrogen Process is a leading technology that can deliver the lowest carbon intensity fuel of its kind,” the release states.

GE’s B&E class heavy-duty gas turbines can already operate on 100% hydrogen, emitting up to 25ppm NOx with the use of water in diffusion combustors. As part of this development agreement GE is targeting gas turbine technology with the capability to operate on 100% hydrogen without the use of water while still maintaining NOx emissions.

The new DLN combustor technology is intended to support retrofittable system solutions for low-carbon operation of gas turbines. DLN combustors are efficient and do not use water as a diluent.

The developments to the DLN combustion technology could be installed on either new or existing 6B or 7E gas turbines. This would help reduce carbon emissions in industrial applications and LNG operations, particularly where water usage is challenging.

In extreme climates the B and E Class heavy-duty gas turbines provide power and perform in many duty cycles. These turbines can use more than 50 types of fuel, including hydrogen —and can switch fuels while running under full load.

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Insurer launches world’s first facility for green and blue hydrogen project risks

The facility provides up to USD 300m of cover per risk for the construction and start up phases of hydrogen projects globally.

Insurance broker Marsh has launched a first-of-its-kind facility to provide dedicated insurance capacity for new and existing green and blue hydrogen energy projects, according to a press release.

Developed in collaboration with insurers Liberty Specialty Markets, part of Liberty Mutual Insurance Group, and AIG, the facility provides up to USD 300m of cover per risk for the construction and start up phases of hydrogen projects globally.

Investment in green and blue hydrogen initiatives is estimated to exceed USD 150bn by 2025 but operators have found it hard to secure adequate insurance market provision for these technologies.

Marsh’s facility is backed by a panel of A-rated global insurers, led by LSM and AIG. It is structured flexibly to enable clients – from small operators to multinational organizations – to choose coverage for the construction or startup phase, or a combined risks policy that extends to first year operations.

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Air Products CEO discusses mega-scale green hydrogen project with AES

Air Products CEO Seifi Ghasemi further discussed its JV with AES Corporation to develop a $4bn green hydrogen project in Texas, noting that roughly half the price tag would come from developing 1.4 GW of renewables to feed the electrolyzers.

Air Products and AES Corporation will form a JV to develop a $4bn integrated green hydrogen facility in Texas, with roughly half of the cost coming from development of 900 MW of wind and 500 MW of solar generation, and the other half for the hydrogen build-out, Air Products CEO Seifi Ghasemi said on an investor call today.

Similar to his company’s JV in Saudi Arabia, the 50/50 JV will develop, build, own and operate a facility in Wilbarger County, at the site of a decommissioned coal-fired plant, Ghasemi said on the call.

Air Products has an exclusive global agreement with thyssenkrupp for electrolyzers, and could include battery storage at the Texas site to help power the electrolyzers, he added.

A separate entity owned 100% by Air Products will be the sole offtaker from the facility, Ghasemi said, which will produce more than 100 mtpd for use in transportation and industrial markets.

The relationship between AES and Air Products is not exclusive, he said.

Air Products expects a minimum internal rate of return of 10%, Ghasemi said. The company is hoping the tax benefits of the project will result in a lower hydrogen price from the JV.

The amount of capital invested by Air Products will be determined by downstream uses, Ghasemi said. The company has yet to decide if it will build a liquefaction plant, transport gaseous hydrogen by pipeline, or convert the hydrogen to ammonia and ship it by rail.

When it was noted that there is not an existing pipeline connecting Wilbarger County to Air Product’s Gulf Coast pipeline, Ghasemi said he was being pressured to get more deeply in the topic than he wanted, but that the company was confident emerging industry in the area would provide the necessary offtake.

“We don’t have to send it all the way down 250 miles to our existing pipeline,” Ghasemi said. “There’s a lot of different options.”

Air Products will not issue new stock to dilute shareholders or jeopardize its A-rating, Ghasemi said.

The labor cost is “very low on these projects,” Ghasemi said. And customers are attracted to getting 30-year contracts not associated with the price of oil, natural gas or geopolitics.

Air Products is investing approximately $500m for a 35 metric ton per day facility to produce green liquid hydrogen at a greenfield site in Massena, New York, as well as liquid hydrogen distribution and dispensing operations.

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Green hydrogen firm secures offtake LOI for Texas project

Clean Energy Holdings has secured an LOI for offtake from a European buyer for phase 1 of a green hydrogen project currently under development in Texas.

Clean Energy Holdings (CEH), a green hydrogen firm, has secured offtake for phase 1 of a green hydrogen project currently under development in Clear Fork, Texas.

A critical component of the project’s progress, the letter of intent for hydrogen offtake was signed this week with a European buyer, CEH chief executive Nicholas Bair said in an interview. He declined to name the offtaker but described it as a national energy security issue for the buyer.

The offtake agreement covers the first 30,000 kg per day of production from the site starting in 4Q24, which encapsulates phase 1 of the project. CEH President Cornelius Fitzgerald said the facility will eventually ramp up in four phases to around 130,000 kg per day of production.

CEH, which develops but also plans to own and operate projects, has assembled a coalition of industry partners, which it calls The Alliance, to provide “soup-to-nuts delivery,” Bair said. “We oversee projects from the first day to the last day the lights are on and the last use of each molecule.”

He added: “In the energy transformation, availability, security, and reliability matter.”

In addition to CEH, the group includes Bair Energy, Chart Industries, Equix, RockeTruck, Coast 2 Coast Logistics, The Eastman Group, and, most recently, HSB.

Bair emphasized the importance of the recent $4.4bn merger announcement between Chart Industries and Howden for its impact on vertical integration for CEH’s projects. Chart and Howden said in a press release last week that the merger will expand Chart’s equipment portfolio and process technology offering for multiple molecules and applications across high growth areas, including hydrogen.

“The acquisition gives CEH high confidence in security of supply from the Chart scope, and when paired with Chart’s performance history and customer centric experience, we believe Chart has increased its important position for our platform and our industry in general,” Fitzgerald added.

CEH had already put in a $100m purchase order for equipment with Chart, which is advising The Alliance on liquefaction, storage, reverse osmosis, and water, but the order jumped to $400m in a phased approach over the next 24 – 36 months following the Howden announcement, Bair said.

Project finance

In order to finance the Clear Fork project, CEH is seeking to raise just under $1bn through sponsor equity and project finance debt, using ING as financial advisor, the executives said. The tenor of the debt will likely come in between seven and 10 years, in line with the terms of the offtake agreement.

CEH has received interest from 142 “top notch” investors for the equity piece, and interest from 42 investors that could do both debt and equity, Bair said.

Bair and Fitzgerald declined to discuss pricing for the offtake contract, but noted the terms were “economically responsible” even without factoring in expanded tax credits included in the Inflation Reduction Act. “We meet the hurdle rates of our investors and our bank” without the tax credits, Bair said.

CEH is on a baseline schedule to reach FID on the Clear Fork project by April, 2023, Bair said, and is working with Norton Rose Fulbright as legal counsel.

More projects

Meanwhile, CEH and its partners are seeking to assemble an ambitious pipeline of projects over the next decade, and have held discussions with additional potential offtakers in foreign and domestic markets.

A project announced last year — CEH’s first — seeks to advance a wind-powered green hydrogen plant in Colorado.

With The Alliance, “The amount of intelligence and experience that we’ve had at the table at the early design phase of these projects has been of tremendous value,” Fitzgerald said.

“Once there’s been enough experience and a bit more trust built up within those relationships, now we’re seeing opportunities to start to come from our platform around where an offtake might be needed,” he added, equating it to a development model that “shops backward” from where the molecule is needed.

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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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