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Exclusive: Morgan Stanley mandated for green ammonia facility

Morgan Stanley is the mandated investment banker for a green ammonia developer that's raising debt and equity for its first facility in Texas.

First Ammonia is working with Morgan Stanley as its investment banker as it seeks to raise debt and equity for a flagship green ammonia project in Texas.

The New York City-based developer is moving toward financial close this year on the first 100 MW train of a 300 MW project at the Port of Victoria, Texas. Morgan Stanley has held the mandate since last year, but it has not been previously reported.

First Ammonia did not respond to requests for comment. Morgan Stanley declined to comment.

In an interview last year, First Ammonia CEO said the 100 MW train of the Port of Victoria project is estimated to cost $300m, while the full 300 MW will cost between $900m – $1bn. Each 100 MW module will produce up to 100,000 MTPA of green ammonia.

The project is expected to be the first in First Ammonia’s global pipeline of green ammonia facilities that will eventually add up to 5 million MTPA of production within 10 years.

The firm has contracted with Haldor Topsoe for 5 GW of solid-oxide electrolysis for its project portfolio. It is seeking a partner to provide 45V-compliant renewable energy to power electrolysis at Port of Victoria, as reported exclusively by ReSource.

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Plug Power cuts near-term hydrogen production forecast, nixes two projects

In a presentation, a company executive said Plug Power was still on track to meet its production targets by the end of 2023.

Plug Power has cut its hydrogen production forecast for this year after cancelling plans for two plants and experiencing permitting delays at a third project.

New York-based Plug will be able to produce roughly 50 tons of green hydrogen per day by year end, compared to an earlier company forecast of 70 tons, Chief Strategy Officer Sanjay Shrestha said Wednesday during a presentation at Plug’s annual symposium.

The company experienced delays for a substation permit at its 45-ton plant in New York, setting the project back by about 12 months. Plug also explored but decided not to pursue two 30-ton-per-day projects, one in Canada and one in Pennsylvania, Shrestha said.

Shares in the Nasdaq-listed company declined more than 13% since Wednesday’s open, trading today at $16.40 per share and a $9.49bn market cap.

Meanwhile, Plug is focused on commissioning its first 15-ton-per-day liquid hydrogen plant in Georgia, and is expanding production at its Tennessee plant from 10 tons of liquid hydrogen to 15 tons, Shrestha said.

“We want to make sure that we’re being really, really prudent about capital allocation as we’re building this network, and not just focus on 50 versus 70 as a number,” he said.

Shrestha added that Plug is still on track to be commissioned for 200 tons per day of production by the end of 2023, and 500 tons per day by 2025.

To reach 200 tons per day, Plus is planning to expand its New York plant to 75 tons per day, and is breaking ground on a plant in Texas that will produce 45 tons per day. The company also has an option to expand its Georgia facility to 45 tons from 15 tons currently.

Source: Plug Power

Multiplier effect

The approval of the Inflation Reduction Act in the US “makes green hydrogen economical versus every single form of grey hydrogen in the market today – period,” Shrestha said, including for refining, for green ammonia, and for methanol. “That is already a 25,000-tons-per-day opportunity.”

The IRA will also lead to major capital formation in hydrogen, potentially steering Plug and others to fund projects with around 30% of equity capital while leveraging the remaining project costs. Plug has been funding projects with 100% equity capital.

With the production tax credit in the IRA, “you will at least get a 4x – 5x multiplier on the equity capital,” he said, allowing Plug to use equity capital to pursue additional projects.

“This will follow a similar pattern to what you have seen in the solar and wind industry in the last decade,” Shrestha said.

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RNG, SAF and biomass projects backed by Canadian government

Public funding to three companies is meant to aid development of six separate RNG, SAF and woody biomass-to-electricity projects across the country, including two in the Niagara region.

The federal government of Canada will invest CAD $15m to support six clean fuels projects across the country, including CAD $10m for two projects in the Niagara region, according to a news release

The federal investments include:

  • $4.6 million to StormFisher Hydrogen to support a front-end engineering (FEED) study for a renewable natural gas (RNG) production facility at BMI’s Multimodal Hub in Thorold, Ontario.
    • Upon the completion of the FEED study in the summer of 2025 and construction of the planned CAD $200m production facility in 2027, StormFisher Hydrogen will combine renewable electricity from Ontario’s clean grid along with biogenic CO2 emissions from local industry to produce 1.25m gigajoules of RNG.
    • The project will support the decarbonization of the Canadian natural gas system and anchor a hydrogen hub in Thorold that will help attract other clean energy and technology businesses to the Niagara region.
  • More than CAD $5m to CHAR Technologies to support FEED studies that will enable CHAR to replicate their first-of-its-kind woody-biomass-to-renewable-energy facility in Thorold, Ontario in other parts of Canada.
    • Supported by an existing investment of $5 million from NRCan, CHAR is finalizing its construction of its clean fuels production facility at BMI’s Multimodal Hub in Thorold, which will convert woody biomass to renewable energy like RNG and biocarbon. The new NRCan funding announced today will enable CHAR Technologies to replicate this work at four new facilities in Kirkland Lake, Ontario; Drayton Valley, Alberta; and Saint Félicien and La Salle, Quebec and create a distributed network of low-carbon fuels production facilities across three provinces in Canada.
    • Taken together, the Thorold, Ontario, project — which is expected to reach commercial production this year — and the four other clean fuel production facilities in Kirkland Lake, Ontario, Quebec; and Alberta – which are expected to come online in the following two years — will maximize the value of underutilized waste wood resources and help decarbonize Canada’s steel and mining industries, and Canadian gas utilities.
  • CAD $5m to support Azure Sustainable Fuels Corp. in delivering a FEED study to support the construction and operation of a sustainable aviation fuels (SAF) production facility in Port Colborne, Ontario.
    • If the project reaches a positive Final Investment Decision (FID), following the completion of the FEED study, it is expected that the Azure’s SAF project would support approximately 1,500 construction jobs and 150 full time jobs during operations in Port Colborne, Ontario.
    • The FEED study is expected to be completed in by the end of 2024 and the construction of the planned facility would be commenced immediately following a positive FID.  The proposed project will be located on the north end of Port Colborne, Ontario, along the Welland Canal — a strategic location that will provide immediate access to local and global markets.
    • The planned processing facility in Port Colborne will leverage Canada’s agricultural sector to produce SAF that will meet the growing demand to help reduce emissions from the aviation sector.  Azure’s proposed project in Port Colbourne is one of three projects that Azure is progressing in Canada, with support from the federal government.

“We are leveraging Canada’s innovative clean tech companies and abundant range of feedstocks — including forest byproducts, agricultural crops and our low-emitting electricity grid — to grow Canada’s domestic production of clean fuels across the economy,” the release states.

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Certarus to supply Michigan gas plant with hydrogen

Over a two-week test, Certarus’ mobile energy distribution platform supplied 1,000+ kilograms of hydrogen at blend rates up to 25%.

Certarus, the Calgary-based on-road low carbon energy solutions, has been selected by WEC Energy Group to supply hydrogen and blending equipment to the A.J. Mihm natural gas-fired power plant near Pelkie, Michigan, according to a press release.

WEC is joined by partners Wärtsilä Corp., Mostardi Platt, the Electric Power Research Institute, and EPC firm Burns & McDonnell.

Over the course of a two-week test, Certarus’ mobile energy distribution platform successfully supplied more than 1,000 kilograms of hydrogen at blend rates up to 25% in an 18 MW Wärtsilä natural gas engine.

During that test, the hydrogen blend generated efficient power to support full engine capacity and produced fewer carbon dioxide and methane emissions compared to natural gas.

EPRI supported the development of the project and led the technical implementation. That company will share a complete analysis of the project in early 2023.

Certarus has supported more than 20 hydrogen customers to date.

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Electrolysis start-up seeking seed money

A two-man hydrogen electrolysis and storage startup based in the southeastern US is seeking an equity investment from a strategic or venture capital investor.

Green Fuel, an early-stage hydrogen technology start-up, is seeking USD 2m in seed money from a strategic or venture capital investor to get its technology off the ground, CFO William Green said in an interview.

The Alabama LLC is comprised of the two founders: Green and inventor Gordon Marsh. Green is based in Missouri.

A patented electrolysis and storage tank system (200 psi) is currently being used for grilling on site of storage, Green said. That prototype application could be scaled up, but the company is interested in pursuing licensing applications in HVAC, fuel cell vehicles, and methanol production.

Green Fuel said in a news release that the atmospheric pressuring system can reduce the cost of hydrogen by 60% by eliminating the need for transportation and compression.

The technology can be scaled to on-site production and tank storage of between 5,000 psi and 10,000 psi, Green said. Proving out that use case is part of the investment need.

“This is a real world solution,” Green said of the invention, which addresses problems in hydrogen transportation and storage. The company is also presenting its technology to the military.

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Houston ammonia and hydrogen terminal on the block

The owners of a recently developed Houston terminal with proximity to ammonia, hydrogen, and nitrogen pipelines are working with an advisor on a sale process.

The owners of Vopak Moda Houston, a Gulf Coast hydrogen and ammonia terminaling asset, have hired an investment bank to run a sale process, according to two sources familiar with the matter.

Intrepid Investment Bankers has been retained to run the process, the sources said.

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

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, which did not respond to a request 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.

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NanoScent seeking new investor to complete blended funding round

NanoScent is seeking a new investor to satisfy the contingencies of a combined EUR 8m investment from existing investors and the European Innovation Council.

NanoScent, an Israel-based technology firm, is seeking a new investor to help solidify an equity investment from the European Innovation Council, CEO Oren Gavriely said in an interview.

To satisfy the contingencies of a combined EUR 8m investment from existing investors and the EIC, NanoScent must bring on a new investor at EUR 2m, Gavriely said.

The ideal investor will have complementary capabilities that can ramp up the revenue stream, Gavriely added. Producers and suppliers of gasses and chemicals for industrial use would make sense.

The money will be used to further develop the proprietary VOCID Purity in-line sensor controller, which measures hydrogen quality by monitoring the cleanliness of gas lines. The technology is oriented towards producers and end-users like fuel cell stations, who will be responsible for the integrity of the hydrogen. The product will be rolled out at the end of 1Q23.

Gavriely said the company has several customers for the technology in the pipeline, declining to say who they are.

NanoScent, founded five years ago, has raised USD 10m in equity to date, with another USD 10m in non-dilutive funding. The company’s largest outside investor is Sumitomo Chemical, which trades on the Tokyo Stock Exchange.

Control of the company is maintained by the founders, Gavriely said.

NanoScent has 20 employees, Gavriely said. So far the company has relied on the expertise of its board, which includes one former investment banker, for financial advisory services. That could change in the future as the company grows.

NanoScent uses Pearl Cohen for law services and EY for accounting.

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