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Exclusive: Texas ammonia developer raising project capital

A developer of large-scale green ammonia projects is in the process of raising $2.5bn in equity and debt for a project in Texas, while also seeking a development partner for 1 GW of co-located renewable generation.

Avina Clean Hydrogen, the multi-faceted developer of green hydrogen and ammonia projects, is raising some $2.5bn in debt and equity for its green ammonia project in Nueces County, Texas, CEO Vishal Shah said in an interview.

The firm, which is based out of Short Hills, New Jersey, has hired an investment bank, Shah said, declining to name the advisor. The raise is targeting a variety of strategic and financial investors with a roughly 60/40 split between equity and debt for the 800,000 mtpy green ammonia facility outside of Corpus Christi, known as Nueces Green Ammonia.

Avina is advancing four more projects, in addition to Nueces Green Ammonia, which is slated for FID in 2Q24, Shah said.

California compressed green hydrogen project is approaching COD in the second half of this year; Avina Northern Illinois will reach FID this year; and additional projects in SAF and methanol are in the works.

The company is also in talks with renewables developers to supply 1 GW of renewable generation co-located with Nueces Green Ammonia.

“We are trying to bring a lot of these first-of-a-kind large scale projects to fruition,” Shah said. “There are more opportunities down the line for additional capital.”

Nueces Green Ammonia, a subsidiary of Avina, has applied for a water permit with the Water and Control District Three of Nueces County in Texas, a local official told ReSource.

The permit, for 4.5 million gallons per day of potable water and 1 million gallons per day of raw water, was recently filed with the office in Robstown, Texas, the official said. The company has also acquired land to the north of Robstown, Texas.

Corpus Christi city council members voted last week to approve a seawater desalination plant – producing 30 million gallons per day – that will be a critical source of water for the growing clean fuels industry in the region.

Avina, via Nueces Green Ammonia, filed for a separate permit to construct the facility with the Texas Commission on Environmental Quality.

ReSource reported in April, 2023 that the company was auditioning advisors for a capital raise.

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LSB Industries hires new VP of Manufacturing

The Oklahoma City-based ammonia producer fills the key role following a retirement.

Oklahoma City-based ammonia producer LSB Industries has hired Scott Bemis to Executive Vice President of Manufacturing following the retirement of John Burns, according to a news release.

Bemis joins LSB from Albemarle Energy Storage where he has served as the Kemerton Site Director since 2023 and as the Richburg MegaFlex Site Director from 2022 to 2023. He holds a Master of Business Administration from the University of Houston – Clear Lake, with a concentration in Management Information System (MIS) and a Bachelor of Science in Chemical Engineering from the University of Arizona.

Burns will remain with LSB during the transition.

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EU innovation fund contributes to two RWE projects

The FUREC project in the Netherlands and an offshore wind farm in Germany are among a total of 17 projects selected by the EU Innovation Fund for the preparation of grant agreements.

German multinational RWE is involved in two hydrogen projects that have been pre-selected for funding by the EU Innovation Fund, according to a press release. The FUREC project in the Netherlands and an offshore wind farm in Germany are among a total of 17 projects selected by the EU Innovation Fund for the preparation of grant agreements.

RWE wants to produce hydrogen for the chemical industry. Household waste from Limburg in the Netherlands is to replace natural gas. The FUREC project includes a plant under construction in Limburg to process household waste into pellets, to then be converted into hydrogen in a separate plant in Limburg’s Chemelot industrial park.

Nordsee Two is majority owned by RWE (51%) and minority by Canadian partner Northland Power (49%). A planned 433 MW wind farm off the German coast is scheduled to start commercial operation in 2026. The partners aim to demonstrate the technical and commercial feasibility of producing hydrogen at sea. An electrolyser is planned to be integrated into the offshore wind farm for the production of green hydrogen for vessel fueling and to supply emergency power to the offshore substation.

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Trafigura renews call for carbon levy to support clean fuels for shipping

The global trading firm had previously proposed a carbon price of $250 – $300 per tonne for carbon fuel oils for shipping.

Global commodity trader Trafigura Group renewed its call for a tax on carbon fuel oils used for shipping in an effort to speed decarbonization of the maritime industry.

The trader, which previously proposed a carbon levy of $250 – $300 per tonne, called on the UN’s International Maritime Organization, a shipping regulator, to revise its GHG policy and implement a carbon levy in a review of the organization’s carbon policy this year.

“By agreeing and implementing ambitious science-based decarbonization targets in its revised GHG Strategy, the IMO can accelerate the development of low- and zero-emission fuels and attract the investment needed to overhaul the infrastructure of the global shipping industry and retrofit or build a fleet of ships,” Trafigura said in the white paper.

Trafigura calls on the IMO to introduce an agreed-upon carbon price by 2025.

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Exclusive: Australian fuels producer looking for US development partners

An Australian fuels producer and concentrated solar power developer partnered with German and US fossil interests is developing its first US clean fuels project in Texas, and is looking for development partners with eyes on the greater southwest.

Vast Energy, the Australia-based and NASDAQ-listed concentrated solar power (CSP) developer and fuels producer, is in the early stages of developing a project near El Paso, Texas – the company’s first in the US – and is seeking US development partners to generate a pipeline of projects throughout the country, CEO Craig Wood said in an interview.

Vast is in process with two projects in Port Augusta, South Australia: VS1, a 30 MW solar/8 MWh storage plant, and SM1, a demonstration solar-to-methanol plant co-located with VS1, producing up to 7,500 mtpa of green methanol from VS1 electricity and heat with extra power available on the grid.

VS1 is scheduled for FID in 3Q24 with FID on SM1 coming the following quarter, Wood said.

Vast recently announced funding agreements with German partner Mabanaft for up to AUD $40m for SM1, after the SM1 project was selected last year as a part of the German-Australian Hydrogen Innovation and Technology Incubator (HyGATE).

Methanol from the $80m SM1 will in part be exported to Germany. Vast is also working with EDF to provide additional financing, Wood said.

“Essentially it’s going to be debt free and on balance sheet,” Wood said.

German container shipping company Hapag-Lloyd recently signed an MOU with Mabanaft to explore options for the supply of ammonia as bunker fuel to Hapag-Lloyd in the Port of Houston.

US opportunity

In the US, where Vast listed to be primed for opportunistic growth, the company has a shortlist of locations around El Paso, has engaged with regional economic development leaders, and held early talks with EPC providers, Wood said.

The El Paso project is being developed in conjunction with Houston-based oil and gas drilling business Nabors Industries, Wood said. Nabors backed the SPAC that took Vast public at a valuation of up to $586m in early 2023. Its current market cap is $64m.

There are ongoing discussions on whether to produce eSAF or methanol in El Paso, Wood said.

To produce eSAF, Vast would use a solid-oxide electrolyzer coupled with the Fischer-Tropsch process, Wood said. Meanwhile, the methanol distillation process lends itself well to Vast’s ability to produce low-cost heat.

CSP has a lower level of embedded carbon than any renewables technology other than wind, Wood said.

“The work that we have done to date indicated that you would most likely power an eFuels project with a CSP plant that was configured to operate in the day and night,” Wood said.

As for project costs, envisioning a project producing some 200 million liters per annum, roughly $3bn would be needed for the power station, and then half that for the infrastructure to make the fuels.

Preliminary offtake for the El Paso project is going to be critical for attracting investment, Wood said. Offtake will depend on the type of fuel produced, though conversations are ongoing with shipping companies (methanol) and airlines (eSAF).

“We’re not expecting to have any problem placing the product,” Wood said. Offtake would likely be targeted for the Port of Los Angeles, LAX airport, the ports of the Gulf Coast, or Dallas Fort Worth International Airport.

Development of CSP makes sense anywhere climate is sunny and hot, Wood said. The company could logically expand into more of West Texas, New Mexico, Arizona and southern California.

The region around Farmington, New Mexico is particularly attractive for CSP development, Wood said. As a huge amount of coal-fired capacity in that area is retired, those interconnections, workforces and resources are ripe for repowering.

The turbines that one of those coal fired power stations would have is the same turbine at the core of Vast’s technology, Wood said. One difference is that Vast’s can be turned on and off quickly.

Development partnerships 

There is an opportunity for Vast to find a development partner, or partners, to stand up a pipeline of projects in two to three years’ time, Wood said.

“Almost everyone wants to wait until our project in Port Augusta reaches COD,” Wood said. “But we don’t want to wait that long to be developing projects in the US.”

Vast is capable of building CSP plants, which can be configured to operate in the day and night, co-located with existing larger-scale solar pv to provide additional generation and, critically, storage, Wood said. By directing sunlight to receivers and heating molten salt, CSP can store energy for 12-to-20 hours overnight to alleviate solar pv’s intermittency issues.

“Coming along and essentially retrofitting complementary CSP next to those [pv plants], we think is a very sensible way to go, both in terms of shared cost but also in terms of managing incremental transmission build,” Wood said. “We’re looking for people we can have conversations with.”

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Reaching bankability: The developing financial landscape around green hydrogen

Panelists at the S&P Platts Global Power Markets conference discussed existing and future opportunities to finance hydrogen production, storage and transport.

Decarbonizing is no longer an option: almost every company in every industry understands that’s the direction in which they need to be moving – now.

And for some companies, hydrogen is the only solution, Fanny Charrier, hydrogen Americas coordinator at Crédit Agricole CIB, said during the Fueling Tomorrow with Hydrogen panel at the S&P Platts Global Power Markets conference this week.

Even so, the project menu is limited.

“We haven’t seen many projects to finance,” Charrier said. “Everybody’s waiting.”

ACES Delta in Utah is thus far the only producing green hydrogen project in the US to raise financing, Charrier said. Credit Agricole is thus focused on M&A debt and equity advisory.

“What we’re looking at is mostly pure green hydrogen projects,” she said. Green ammonia shipping to Europe is a main end-use and market. Project sizes range from a few million up to USD 5bn. “We’re also supporting some electrolyzer manufacturing plants.”

Mobility, heavy trucks and shippers looking for hydrogen is a potentially huge market, but hasn’t materialized yet, she said.

Demand signals

In Europe, commitments to close traditional power generation assets hold promise for clean fuels, António Fayad, manager of hydrogen strategy at EDP Renewables, said during the panel. In the US, EDP is mainly looking to industry to buy hydrogen at or adjacent to factories and other relevant facilities.

There has been a strong, customer-led demand signal from the US, said Sam Bartholomaeus, vice president of power and renewables at Woodside Energy. Woodside was already considering a hydrogen project in Oklahoma when the IRA was passed.

“The signal was already there in terms of seeing demand sectors that need to be decarbonized and seeing that we had a competitive proposition,” he said of the hydrogen portfolio Woodside is developing in the US.

Woodside recently signed a contract for Air Liquide to provide liquefaction equipment for a hydrogen project in Ardmore, Oklahoma. First production at that project will begin in 2026 and Woodside is targeting FID this year.

Government support and finding offtake  

Last year, the USD 504m loan guarantee for the US Department of Energy was a huge boost for the ACES Delta in Utah, Susan Fernandez, senior director of strategy at ACES-Delta, said.

That kind of support from governments and legislatively mandated decarbonization quickens the proliferation of new hydrogen technologies and projects.

“Others will also have the ability to receive more loan guarantee dollars,” Fernandez said of the post-IRA landscape. “We’ll see more projects come to the space.”

Still, offtake is key to reaching bankability, Charrier said.

“The key is always the offtake,” she said. Rather than a chicken-and-egg metaphor, she said she likes to mention a domino effect. “Yes, at the beginning we’ll have to pay a premium, but if it’s driven by a net-zero commitment everything will fall into place.”

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Exclusive: New sustainability hedge fund to raise up to $2bn

A new hedge fund founded by a clean fuels industry veteran is gathering partners to raise up to $2bn initially for deployment into ammonia and other climate-transition technologies.

New Waters Capital, an emerging hedge fund based in New York City, is gathering its primary partners for its first fundraise of between $1bn and $2bn, founder Bill Brown said in an interview.

Brown formerly spent 15 years at North Carolina-based 8 Rivers Capital, which recently announced an ammonia project in Texas. Brown, a co-founder, sold his shares to South Korea’s SK, Inc. in that company’s majority takeover of 8 Rivers last year.

Brown recently created New Waters as a multi-strategy fund manager to invest in publicly traded companies in sustainability, AI, and clean fuels.

“The molecule-based economy is really important, and there’s some companies that have been in the molecule-based economy that are not really sure what they’re doing,” Brown said.

This creates an environment ripe for disruption, he said.

The firm is in the process of selecting its prime brokers, which will help determine the size of New Waters’ fundraises, Brown said. The first raise will be conducted in the next six months, and likely not be larger than $2bn to start.

New Waters’ law firm is Seward & Kissel.
The Wild West of molecules

Of all hydrogen produced in the US, about 65% is used for fertilizer production, Brown said. In Japan, where hydrogen is being co-fired with coal, replacing all coal-fired generation with ammonia would require 10 times the current ammonia production of the US.

“The market for molecules is so big, and yet the largest producer in the US of ammonia is CF Industries.” That company has one plant in Louisiana that represents roughly one third of total US ammonia production. “So CF is tiny compared to the opportunities out there.”

Brown said he is looking for the companies that are going to be the Valero and Phillips 66 of ammonia refining. He believes 8 Rivers is on track for something like that.

“We look at companies like that,” he said. “I think that entire market is up for grabs right now; it’s a whole new market.”

 Companies that can seize that market are the companies that are going to be part of the energy system of the future.

“In many respects right now, we’re in the Wild West, if you will, of the molecules of the future,” Brown said.

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