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Glenfarne launches hydrogen fuels initiative

Glenfarne’s Hydrogen Fuels Initiative includes projects in Chile, Texas, and Louisiana, which together will produce approximately 1,500 kilotons of ammonia.

Glenfarne Energy Transition, a wholly owned subsidiary of Glenfarne Group, focused on addressing the “here and now” global energy transition is launching its Glenfarne Hydrogen Fuels Initiative, according to a news release.

The initiative aims to produce sustainable, zero carbon hydrogen-based fuels. In conjunction with its liquefied natural gas business, Glenfarne will continue to support its clients, customers, and partners in Asia, Europe, and the Americas in the energy transition.

Hydrogen-based fuels use hydrogen as the primary source of energy and generate little to no greenhouse gas emissions. They have a wide variety of applications across different industries, making them a versatile supplement to fossil fuels.

“Our 700 strong Glenfarne Energy Transition team has been fielding an increasing volume of inquiries from our customers, and business partners to collaborate on hydrogen-based fuels,” said Brendan Duval, CEO and Founder of Glenfarne Group and Glenfarne Energy Transition. “Glenfarne is engaged with several LNG stakeholders to help them use LNG as a long-term bridge to their domestic carbon targets, which ultimately includes the transition to hydrogen-based fuels. Our LNG customers will have preferential access to secure these hydrogen-based fuels from our projects.”

Glenfarne’s Hydrogen Fuels Initiative includes projects in Chile, Texas, and Louisiana, which together will produce approximately 1,500 kilotons of ammonia.

“Glenfarne’s Hydrogen Fuels Initiative will be transformational to how LNG customers and European and Asian governments will view gas imports. Alongside our LNG platform, we will be uniquely able to offer more definitive solutions for green-ready hydrogen infrastructure buildout and support their future demand for green hydrogen-based fuels,” Duval added.

Besides its hydrogen-based fuel projects, Glenfarne’s existing assets include 14 grid stability power plants, 29 renewable assets and two LNG export projects – Texas LNG and Magnolia LNG – approved for 12.8 million tonnes per annum of export capacity, 4,500 miles of gas pipelines, and 13 gas processing plants. With an experienced management team and a meaningful track record of success, Glenfarne Energy Transition brings a unique combination of project development skills, physical locations, and knowledge of global energy markets relating to hydrogen-based fuels.

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Raven SR and H3 Dynamics sign MoU for waste-to-hydrogen supply at airports

The companies will jointly develop renewable hydrogen facilities to supply fuel for various ground operations at airports.

Raven SR Inc., a renewable fuels company, and H3 Dynamics, a developer of hydrogen aviation technologies, today announced their memorandum of understanding to globally collaborate on waste-to-hydrogen energy systems to support the decarbonization of airport operations and the adoption of hydrogen at airports.

H3 Dynamics will provide hydrogen power systems to replace conventional fuel and other energy sources at airports, especially in Asia, Europe and the US. Raven SR will provide renewable hydrogen production facilities to supply airports. The use of hydrogen to power various ground operations will help reduce emissions at airports.

“We see tremendous demand to decarbonize the aviation sector with renewable fuels, including on the ground,” said Matt Murdock, CEO of Raven SR. “By collaborating with H3 Dynamics, we can reach a broader network among airports and equipment, including a variety of aircraft operations, to install waste-to-energy hubs where there is an acute need to curb emissions.”

The Raven SR technology is a non-combustion thermal, chemical reductive process that converts organic waste and landfill gas to hydrogen and Fischer-Tropsch synthetic fuels. Unlike other hydrogen production technologies such as electrolysis, Raven SR’s Steam/CO2 reformation does not require fresh water as a feedstock. The process is more efficient than conventional hydrogen production and can deliver fuel with low to negative carbon intensity. Additionally, Raven SR’s goal is to generate as much of its own power onsite as possible to reduce reliance on the power grid and even be independent of the grid. Its modular design provides a scalable means to locally produce renewable hydrogen and synthetic liquid fuels from local waste.

“Raven SR provides a way to convert a variety of waste feedstocks into clean hydrogen, with a process that uses less energy than other renewable hydrogen production. Raven SR’s advanced waste-to-hydrogen technology offers a less intensive, more sustainable means of locally producing fuel,” said Taras Wankewycz, CEO of H3 Dynamics.

H3 Dynamics will work with its technology and manufacturing partners to configure hydrogen power systems componentry to meet certification requirements within the airport and aircraft environment.

“H3 Dynamics will deploy decarbonization use cases that have a more immediate impact, so that the infrastructure built today can also welcome hydrogen aircraft in the future,” said Wankewycz.

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NOVA Infra and Nopetro Energy form new RNG and biofuels JV

Nopetro Renewables, a newly formed company, will construct one of Florida’s first landfill-gas-to-RNG facilities in Vero Beach.

NOVA Infrastructure, a middle-market infrastructure investment firm, has partnered with Nopetro Energy to create a renewable energy platform focused on renewable natural gas and biofuels, according to a news release.

Nopetro Renewables will construct one of Florida’s first landfill-gas-to-RNG facilities in Vero Beach. In addition to investing in the newly formed Nopetro Renewables’ platform, NOVA also has made an equity investment in Nopetro Energy.

“Our new platform, Nopetro Renewables, seeks to build and operate renewable energy infrastructure, starting with a shovel-ready landfill-gas-to-RNG project in Vero Beach,” Chris Beall, founder and managing partner of NOVA Infrastructure, said in the release.

Nopetro was founded in 2007 with the goal of displacing petroleum consumption with a cleaner, cost-effective and domestic natural gas fuel. Led by Jorge Herrera, the company has developed a strong reputation in the US southeast and currently operates 16 CNG fueling facilities where it serves government, waste, and industrial customers.

In July 2022, NOVA announced the close of its $565m Infrastructure Fund I, which attracted commitments from a diverse group of leading North American and global institutional investors including public and private pension funds, insurance companies, family offices and asset managers.

NOVA’s investment in Nopetro marks its seventh platform investment as part of Fund I and is a continuation of its strategy of targeting middle-market providers across the infrastructure landscape.

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Woodside Energy invests in US CO2-to-protein technology company

Woodside will invest $3m into California-based NovoNutrients under a technology development agreement.

NovoNutrients has announced the signing of a technology development agreement under which Woodside Energy would contribute up to $3m to NovoNutrients, subject to the completion of certain milestones by NovoNutrients, according to a news release.

NovoNutrients’ technology converts industrial CO2 emissions into high-quality protein, with the potential to abate greenhouse gas emissions and contribute to the world’s food and feed supply. The collaboration with NovoNutrients is aligned with Woodside’s view of carbon capture and utilization (CCU) as an emerging field offering alternative lower-carbon solutions.

NovoNutrients’ technology has been operating at a lab-scale. This agreement supports the construction and operation of a larger pilot-scale system. The pilot-scale system will seek to both advance the design of commercial-scale plants and deliver increased sample product volume for further validation by NovoNutrients’ strategic partners, including Woodside.

“Our agreement with Woodside means, together, we can deliver meaningful carbon benefits sooner, while also tackling the world’s need for protein,” said David Tze, CEO of NovoNutrients.

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Hydrogen firm launches equity raise

A US hydrogen infrastructure and project development outfit has mandated a banker to conduct a raise for equity and project capital.

Lifte H2, the Boston-based hydrogen infrastructure and project developer, has mandated a banker to conduct a Series A capital raise, according to two sources familiar with the matter.

Energy & Industrial Advisory Partners is running the process, which launched recently, the sources said. Lifte H2 is seeking equity in the topco and development capital for its first project.

Talks with strategic and financial investors are being conducted now.

Lifte H2, which also has offices in Berlin, is led by Co-founder and CEO Matthew Blieske, who served as global hydrogen product manager for Shell before starting Lifte H2 in 2021. The founding team also includes Jeremy Manaus, Angela Akroyd, Richard Zhang, Paul Karzel, and Richard Wiens, all of whom previously worked at Shell.

In January, the company launched two hydrogen transport and dispensing products, the MACH₂ Mobile Refueler, which is a combination dispenser and high-capacity trailer; and the MACH2 High-Capacity Hydrogen Trailer, which has a capacity of 1,330 kg at approximately 550 bar and, according to the company, enables the lowest cost per kilogram for over-the-road transport.

The company signed an MOU last year with Swiss compressor manufacturer Burckhardt Compression to develop a joint offering of hydrogen solutions.

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EnCap’s Shawn Cumberland on the fund’s approach to clean fuels

Cumberland, a managing partner with EnCap Energy Transition, discusses how the clean fuels sector compares to the emergence of other new energy technologies, and outlines the firm’s wait-and-see approach to investment in hydrogen and other clean fuels.

EnCap Energy Transition, the energy transition-focused arm of EnCap Investments, is evaluating scores of opportunities in the hydrogen and clean fuels space but doesn’t feel the need to be an early mover if the risk economics don’t work, Managing Partner Shawn Cumberland said in an interview.

Houston-based EnCap prefers to invest in early stages and grow companies deploying proven technologies to the point that they’re ready to be passed onto another investor with much deeper pockets. There are hundreds of early-stage clean fuels companies looking for growth equity in the space, he said, but the firm believes it’s not necessary to deploy before the technology or market is ready.

Given the fund’s strategy of investing in the growth-equity stage, EnCap gains exposure to a niche set of businesses that are not yet subjected to the broader financial markets.

For example, when EnCap stood up Energy Transition Fund I, a $1.2bn growth capital vehicle, the manager piled heavily into storage, dedicating some $600m, more than half of the fund, to the sector.

“That was at a time when all we saw were some people putting some really dinky 10 MW and 20 MW projects online,” he said. “We absolutely wanted to be a first and fast mover and saw a compelling opportunity.”

The reasons for that were two converging macro factors. One was that the battery costs had come down 90% because of EV development. Meanwhile, the demand for batteries required storage to be built out rapidly at scale. So, that inflection point – in addition to the apparent dearth of investor interest in the space at the time – called for early action.

“We were sanctioning the build of these things with no IRA,” Cumberland said.

‘If it works’

To be sure, EnCap is not a technology venture capital firm and waits for technologies to be proven.

As such, the clean fuels sector could end up being a longer play for EnCap, Cumberland noted, but the fund continues to weigh whether there will be a penalty for waiting. In the meantime, regulatory issues like IRS guidance on “additionality” for green hydrogen and the impact of the EU’s rules for renewable fuels of non-biological origin should get resolved.

Still, market timing plays a role, and the EnCap portfolio includes a 2021 investment into Arbor Renewable Gas, which develops and owns facilities that convert woody biomass into low-carbon renewable gasoline and green hydrogen.

Cumberland also pointed to EnCap’s investment in wind developer Triple Oak Power, which is currently for sale via Marathon Capital. That investment was made when many industry players were moving toward solar and dropping attention to wind.

Now, clean fuels are trading at a premium because of investor interest and generous government incentives for the sector, he noted.

“Hydrogen, if it works, may be more like solar,” Cumberland said, describing the hockey-stick growth trajectory of the solar industry over 15 years. If the industry is cost-competitive without subsidies, there will be a flood of project development that requires massive funding and talented management teams

“We won’t be late to the party,” he said.

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Exclusive: Riverstone Credit spinout preparing $500m fundraise

Breakwall Capital, a new fund put together by former Riverstone Credit fund managers, is preparing to raise $500m to make project loans in decarbonization as well as the traditional energy sector. We spoke to founders Christopher Abbate and Daniel Flannery.

Breakwall Capital is preparing to launch a $500m fundraising effort for a new fund – called Breakwall Energy Credit I – that will focus on investments in decarbonization as well as the traditional energy sector.

The founders of the new fund, Christopher Abbate, Daniel Flannery, and Jamie Brodsky, have spent the last 10 years making oil and gas credit investments at Riverstone Credit, while pivoting in recent years to investments in sustainability and decarbonization.

In addition to bringing in fresh capital, Breakwall will manage funds raised from Dutch trading firm Vitol, for a fund called Valor Upstream Credit Partners; and the partners will help wind down the remaining roughly $1bn of investments held in two Riverstone funds.

Drawing on their experience at Riverstone, Breakwall will continue to make investments through sustainability-linked loans across the energy value chain, but will also invest in the upstream oil and gas sector through Valor and the new Breakwall fund.

“We’re not abandoning the conventional hydrocarbon economy,” Flannery said in an interview. “We’re embracing the energy transition economy and we’re doing it all with the same sort of mindset that everything we do is encouraging our borrowers to be more sustainable.”

In splitting from Riverstone Credit, where they made nearly $6bn of investments, the founders of Breakwall said they have maintained cordial relations, such that Breakwall will seek to tap some of the same LPs that invested in Riverstone. The partners have also lined up a revenue sharing arrangement with Riverstone so that interests are aligned on fund management.

The primary reason for the spinout, according to Abbate, “was really to give both sides more resources to work with: on their side, less headcount relative to AUM, and on our side, more equity capital to reward people with and incent people with and recruit people with, because Riverstone was not a firm that broadly distributed equity to the team.”

Investment thesis

A typical Breakwall loan deal will involve a small or mid-sized energy company that either can’t get a bank loan or can’t get enough of a bank loan to finance a capital-intensive project. Usually, a considerable amount of equity has already been invested to get the project to a certain maturity level, and it needs a bridge to completion.

“We designed our entire investment philosophy around being a transitional credit capital provider to these companies who only needed our cost of capital for a very specific period of time,” Flannery said.

Breakwall provides repayable short-duration bridge-like solutions to these growing energy companies that will eventually take out the loan with a lower cost of capital or an asset sale, or in the case of an upstream business, pay them off with cash flow.

“We’re solving a need that exists because there’s been a flock of capital away from the upstream universe,” he added.

Often, Breakwall loan deals, which come at pricing in the SOFR+ 850bps range, will be taken out by the leveraged loan or high yield market at lower pricing in the SOFR+ 350bps range, once a project comes online, Abbate said. 

Breakwall’s underwriting strategy, as such, evaluates a project’s chances of success and the obstacles to getting built. 

The partners point to a recent loan to publicly listed renewable natural gas producer Clean Energy – a four-year $150m sustainability-linked senior secured term loan – as one of their most successful, where most of the proceeds were used to build RNG facilities. Sustainability-linked loans tie loan economics to key performance indicators (KPIs) aimed at incentivizing cleaner practices.

In fact, in clean fuels, their investment thesis centers on the potential of RNG as a viable solution for sectors like long-haul trucking, where electrification may present challenges. 

“We are big believers in RNG,” Flannery said. “We believe that the combination of the demand and the credit regimes in certain jurisdictions make that a very compelling investment thesis.”

EPIC loan

In another loan deal, the Breakwall partners previously financed the construction of EPIC Midstream’s propane pipeline from Corpus Christi east to Sweeny, Texas.

Originally a $150m project, Riverstone provided $75m of debt, while EPIC committed the remaining capital, with COVID-induced cost overruns leading to a total of $95m of equity provided by the midstream company. 

The only contract the propane project had was a minimum volume commitment with EPIC’s Y-Grade pipeline, because the Y-Grade pipeline, which ran to the Robstown fractionator near Corpus Christi, needed an outlet to the Houston petrochemical market, as there wasn’t enough export demand out of Corpus Christi.

“So critical infrastructure: perfect example of what we do, because if your only credit is Y-Grade, you’re just a derivative to the Y-Grade cost of capital,” Abbate said.

Asked if Breakwall would look at financing the construction of a 500-mile hydrogen pipeline that EPIC is evaluating, Abbate answered affirmatively.

“If those guys called me and said, ‘Hey, we want to build this 500-mile pipeline,’ I’d look at it,” he said. “I have to see what the contracts look like, but that’s exactly what type of project we would like to look at.”

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