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Green hydrogen firm adds former Cummins, Rolls-Royce, and bp execs to advisory board

The executives will help guide Avina's strategic initiatives and advise on the use of hydrogen for decarbonization in hard-to-abate sectors.

Avina Clean Hydrogen, a green hydrogen and green fuels developer, today announced the addition of Tom Linebarger, former CEO of Cummins, Susan Dio, former President & Chairman of BP America, and Warren East, former CEO of Rolls-Royce to the Avina Advisory Board (AAB), according to a news release.

This distinguished group will help shape and guide Avina’s strategic initiatives, as well as advise on how best to leverage hydrogen to address decarbonization challenges of hard-to-abate sectors.

“We are so grateful that a highly esteemed group of leaders have agreed to serve as our inaugural advisory board and have chosen Avina as a platform to drive meaningful decarbonization in hard-to-abate sectors,” said Vishal Shah, Founder & CEO of Avina Clean Hydrogen. “Now, more than ever before, green hydrogen has a meaningful role to play as a climate solution in multiple industries and each leader brings a unique expertise and perspective from their respective backgrounds, which will be crucial in addressing the needs of a diverse portfolio of industries and end customers.”

ReSource reported previously that Avina would seek to raise approximately $1bn for green hydrogen projects this year.

Tom Linebarger is Executive Chairman and Chairman of the Board of Cummins, a global technology leader in engines, filtration and power generation products, and was the CEO for more than 10 years until he stepped down in August of 2022. As CEO, Tom refocused the company, positioning it to be a leader in zero and low-carbon solutions. Under Tom’s leadership, Cummins developed Destination Zero, the company’s strategy to achieve net zero emissions by 2050. To achieve this goal, Cummins is offering customers a range of solutions required for the energy transition including advanced diesel, natural gas and fuel agnostic engine platforms. Cummins recently announced a hydrogen internal combustion technology that includes a 15L hydrogen engine, which will go into full production in 2027. The company has also announced several fuel cell partnerships with Daimler Truck North America, Komatsu and Scania as well as converting Air Products’ 2,000-truck delivery fleet to fuel cell electric vehicles. In addition, Cummins is manufacturing a hydrogen fuel cell powertrain for use in North America and continues to build a leading presence in the electrolyzer business.

Currently, Tom is the co-chair of The Hydrogen Council, a global CEO-led coalition working to accelerate the energy transition through hydrogen. The Hydrogen Council includes CEOs from over 300 companies in sectors including automotive, gas, utility and technology companies.

“There are few executives in the world who share Tom’s wealth of experience in driving legacy sectors to adopt zero and low-carbon solutions,” said Vishal Shah, CEO of Avina. “We are fortunate to have a leader with his background to embrace and champion Avina’s mission to accelerate the energy transition in hard-to-decarbonize sectors by bringing solutions to deploy green hydrogen at scale.”

Susan Dio is a proven executive with 25+ years’ experience in international refining, petrochemicals, and oil and gas. Prior to her retirement in 2020, Susan was Chairman and President of BP America where she had responsibility for all BP businesses in the U.S. In addition, she worked with policymakers, partnerships and trade associations on trade, and energy policy, as well as navigating the energy transition toward a low-carbon future. As Chairman of the BP America Board, she focused on setting strategic direction and oversight of material risk across the 350 US subsidiaries. Between 2015 and 2018, Susan was CEO of BP Shipping, which managed the fleet of BP-operated and chartered vessels that moved over 200 million tons of products around the globe each year. As CEO, she reset the organization’s strategy and operations and modernized the company’s fleet, delivering 26 new, highly efficient tankers. Other roles Susan held at BP include Head of Audit for refining and marketing and Managing Director of a refinery in Australia. She holds a degree in chemical engineering.

“Susan’s leadership and expertise, especially in the oil & gas sector, will be invaluable as we continue our conversations with leading executives who recognize the importance of hydrogen in solving the toughest de-carbonization challenges in the energy sector,” said Vishal Shah, CEO of Avina.

Warren East retired as the CEO of Rolls-Royce in December 2022. Warren initially joined the company as a board member in 2014 after retiring as the CEO of semiconductor company ARM and later, stepped into the CEO role in 2015. Rolls-Royce manufactures aircraft engines as well as engines for boats, trains, large land vehicles and nuclear submarine reactors. As CEO, Warren pushed to modernize the company and to embrace sustainability. He committed to becoming a net-zero carbon company by 2050, and with the future of the business in mind, invested money in R&D around new aero engine design and in nuclear power, and established a sustainable solutions business in the Power Systems division, to develop micro grid solutions including hydrogen electrolyzers and fuel cells. The company created a new business to focus on electrical aviation and broke the world record for the fastest electric flight. Recently Rolls-Royce demonstrated a gas turbine aero engine running on 100% hydrogen and in the meantime, is also enabling all its aero engines to run on 100% sustainable aviation fuel (SAF) as well as working across the industry to establish the SAF ecosystem.

“Warren’s extraordinary legacy of trailblazing leadership in technology and aviation sectors will be very valuable to Avina’s continued growth,” said Steven Berkenfeld, Board Member of Avina. “We are excited for Warren to share his unique perspectives with our team as we continue to deploy green hydrogen and ammonia solutions in new sectors.”

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LSB CEO Mark Behrman: new ammonia markets could reshape – and revalue – the company

We spoke to CEO Mark Behrman about his vision of the company’s future.

Oklahoma City-based ammonia producer LSB Industries wants to be a player in new markets for ammonia as they develop, and is nearing a deal to provide blue ammonia to an existing customer in its ammonium nitrate and nitric acid segment, CEO Mark Behrman said in an interview.

Though Behrman expects LSB’s sales mix to shift – and the company’s valuation to rise – as ammonia markets evolve, it is pursuing deals to furnish blue ammonia at a premium to customers in its ammonium nitrate and nitric acid segment, currently its largest portion of net sales.

LSB is developing a blue ammonia facility on the Houston Ship Channel with INPEX and Air Liquide, offtake contracts for which could push its earnings mix away from more volatile fertilizer markets and help revalue the company. It also has a partnership with Lapis Energy for the installation of a carbon capture unit at its ammonia production facility in El Dorado, Arkansas.

“Unlike a lot of our competitors, who are really known as fertilizer companies, half our business is non-fertilizer,” he said. “So we’re really familiar with the non-fertilizer markets and the pricing and contractual nature of those markets.”

The company is in talks with its mining and nitric acid customers – Covestro, Dow, BASF – about helping them lower their carbon footprint via blue ammonia so these customers can meet 2030 decarbonization goals, said Behrman, who hopes to announce a sizeable contract within the next several months, “obviously at some premium to the price that they’re paying today.”

As for what the blue premium will be, for some markets the formulation might come down to the required capital investments and the developer’s desired return.

“I want long-term cost plus offtake contracts so I could de-risk the volatility in any cost,” he said. 

By way of example, Behrman said, “If we’re selling to JERA, and we have a long-term contract, and it’s a cost plus, so natural gas and power plus, it might be at a healthy premium to the overall ammonia market, or it might be a discount to the overall market,” he said, “but basically we’ve built an annuity because we’ve got a long-term contract at cost plus, and lock in our return as long as we operate the plant well.”

‘Meaningful player’

Behrman, a former investment banker, recognizes that it’s a brave new world for ammonia – particularly clean ammonia – with demand expected to come from myriad new places like shipping and power production. “We want to be a meaningful player as the new demand develops for ammonia,” he said. 

But he believes the market will evolve more slowly than expected, noting that initial estimates even for Japanese offtake and use of ammonia have already been pushed back.

“I think in the earlier years, so call it ‘28, ‘29, even ‘30, you’re probably only going to have two or three offtakers out of Japan until the other ones come online.” Korea, on the other hand, might be faster due to its national incentive scheme, he said.

Meanwhile, in the last few months, LSB has had a lot of conversations with potential European offtakers as Europe’s carbon tax scheme and the Carbon Border Adjustment Mechanism (CBAM) take hold.

“Europe, while still significantly focused on green, has come to the realization that it’s an energy transition and not an energy revolution,” he said. “So I think that we’re looking at trying to secure some European offtake as well.”

Behrman believes that, over time, 400 million metric tons of new demand for ammonia could materialize – the current global market is around 175 million metric tons – but “it would take a lot of switching from hydrocarbons to ammonia, or to partial ammonia as a feedstock, and it’s going to take the marine industry to really ramp up.”

The principal gating factors, he said, are the infrastructure required to support the transition and parties coming together on price.

Mix shift

The Houston Ship Channel project could be a centerpiece in LSB’s efforts to expand into new markets and potentially transform the way the business is valued.

“As we think about where we’re going and our vision of really being a leader in the production of low-carbon products, I think you’ll start to see more of our production trend away from fertilizer and to existing markets that we’re in by broadening some of those markets, plus really focusing on taking advantage of some of these new markets,” he said.

One reason is for the stability of the contracts compared to fertilizer markets, he added, which feeds into the second reason: predictability of earnings could lead to higher multiples on LSB’s equity, akin to valuation multiples for Air Liquide, Linde, and Air Products. For reference, LSB’s equity trades in the mid to high single digits on an enterprise value to LTM EBITDA basis, while equities for the aforementioned companies trade in the mid to high teens.

On LSB’s most recent earnings call, Behrman detailed some of the expected economics from the Houston Ship Channel project as well as the in-development blue ammonia facility in El Dorado, Arkansas. He expects to add roughly $150m of EBITDA each year from the Houston Ship Channel project and $15m – $20m of EBITDA annually from the carbon capture installation in Arkansas.

Behrman clarified in the interview that the $150m figure assumes 100% ownership of the facility, and that LSB’s ultimate ownership would come in the 45% – 49% range.

LSB is expecting to finish the pre-FEED study for the project in July or August of this year, at which point they would elect to proceed with a FEED study that would finish around September, 2025.

The company will use a project finance model to fund the project, and recently ran a process to select a banker, the terms of which are still being negotiated. Behrman declined to name the advisor.

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Air Liquide invests in two U.S. RNG units

Air Liquide has commenced construction on two dairy-waste RNG units in Pennsylvania and Michigan.

Air Liquide has commenced construction of two new RNG production units located in Center Township, Pennsylvania, and Holland Township, Michigan, treating waste sourced from dairy farms, according to a press release.

The production units will produce biogas from manure feedstock in an anaerobic digester for a total production capacity of 74 GWh, and return the digested waste for the farms’ needs, promoting circular economy in waste management. Using Air Liquide’s proprietary gas separation membrane technology, the biogas will then be purified into RNG and injected into the natural gas grid.

Air Liquide has developed competencies throughout the whole biomethane value chain, starting with biogas production from waste, to its purification into biomethane to be injected into gas grids or compression/liquefaction with storage and transportation to customers. Air Liquide currently has 26 biomethane operational production units in the world for a yearly production capacity of about 1.8 TWh, according to the news release.

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Bloom Energy starts new commercial electrolyzer line

The new line increases the company’s generating capacity of electrolyzers to 2 GW.

Bloom Energy Corporation has inaugurated its high volume commercial electrolyzer line at the company’s plant in Newark, Delaware, according to a press release.

The new line increases the company’s generating capacity of electrolyzers to 2 GW.

In the last decade, the facility has produced over 1 gigawatt (GW) of fuel cell-based Energy Servers. The Bloom Electrolyzer relies on the same solid oxide technology platform used to produce electricity, so the company can streamline existing manufacturing.

The technology is being demonstrated in partnerships withand Idaho National Labs to harness nuclear and steam power, and will be demonstrated with LSB Industries, Inc. to decarbonize industrial and agricultural sectors. Internationally, the technology is in use in South Korea.

In July of this year Bloom Energy opened a 164,000 square foot, multi-gigawatt facility in Fremont, California, representing USD 200m in investment and bringing Bloom’s California headcount to nearly 2,000 in addition to its 715 Delaware employees.

Bloom recently announced plans to install a 240-kW electrolyzer at the Xcel Energy Prairie Island nuclear plant in Welch, Minnesota.

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AIMCo-backed midstream infrastructure firm in refi

The company, whose asset footprint includes Gulf Coast hydrogen production, today priced a debt refinancing transaction with an 8.875% coupon.

Howard Energy Partners today priced $550m of senior unsecured notes to refinance amounts outstanding on its revolving credit facility.

The company, which is majority owned by the Alberta Investment Management Corporation (AIMCo), will pay 8.875% on the notes, inside of price talk of between 8.75% – 9%, according to sources familiar with the matter.

RBC Capital Markets and TD Securities are joint active bookrunners on the deal, the sources said.

Howard in 2021 closed on the acquisition of the Javelina Facility in Corpus Christi, Texas — a treating and fractionation plant that extracts olefins, hydrogen, and natural gas liquids from the gas streams produced by local refineries.

Starting in Jan of 2023, a strategic technology partner began producing a low-carbon diesel substitute using Javelina’s hydrogen and CO2 as feedstocks, making it one of the first merchant “clean” hydrogen facilities on the US Gulf Coast, according to the company. HEP is also pursuing carbon capture and sequestration opportunities with its Javelina assets through a joint venture with TALOS Energy and the Port of Corpus Christi.

AIMCo acquired an initial 28% stake in HEP in 2017, and brought its ownership stake to 87% last year following the purchase of Astatine Investment Partners’ stake in the company.

Howard operates in two key segments in the US and Mexico: natural gas and liquids. The natural gas segment includes 1,175 miles of pipelines and approximately 4.3 Bcf/d of throughput capacity and 600 MMCf/d of cryogenic processing capacity.

The liquids segment includes terminalling and logistics services for refined products as well as refinery-focused off-gas handling, treating, processing, fractionation and hydrogen supply services.

Spokespersons for the company, RBC, and TD did not respond to emails seeking comment.

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Exclusive: Monarch Energy targeting green hydrogen FID in 2024

Monarch is moving forward with several green hydrogen projects in the Gulf Coast region, most notably a 500 MW project near Beaumont, Texas and a 300 MW project near Geismar, Louisiana.

Green hydrogen developer Monarch Energy aims to take its first final investment decision as soon as next year, CEO Ben Alingh said in an interview.

Monarch is moving forward with several green hydrogen projects in the Gulf Coast region, most notably a 500 MW project near Beaumont, Texas and a 300 MW project near Geismar, Louisiana.

Alingh said the company is seeking to advance the projects to FID by late 2024 and early 2025. Monarch has not engaged a project finance banker yet, he said.

The company recently announced a $25m preferred equity investment and $400m project equity commitment from LS Power.

The proceeds of the preferred equity raise will fund pre-FID aspects of Monarch’s 4.5 GW green hydrogen development platform: overhead, project development, interconnection, land, permitting, and engineering.

The $400m commitment, meanwhile, is earmarked for project equity investments in Monarch’s pipeline of projects. Under the arrangement, the projects will be dropped into a new entity, Clean Hydrogen Fuels, LLC, where LS Power provides the capital and Monarch provides the project, Alingh said.

“On a project-by-project basis the projects will be transferred to Clean Hydrogen Fuels if they are selected,” he said. The Clean Hydrogen Fuels entity is jointly owned by Monarch and LS Power.

Monarch did not use a financial advisor for the capital raise. Clean Energy Counsel served as Monarch’s law firm.

For both the Beaumont and Geismar facilities, Monarch has signed MoUs with Entergy to supply long-term renewable power. Monarch is engaged with industrial users of hydrogen in each location as potential offtakers. It plans to deliver hydrogen via local Monarch-developed hydrogen pipelines that it is developing with EPC partners, he said.

“We endeavor to be as close to our end user as possible with our electrolyzer project, to limit development and execution risk on delivery,” he said. For the volumes of Monarch’s projects, trucking solutions are not on the table, he said, as it would simply require too many trucks.

The company has additional production facilities under development in Freeport, Texas, as well as four other locations in Texas, according to the ReSource project database.

Monarch is also interested in end markets for hydrogen derivatives like methanol and ammonia, but Alingh notes that every project “starts with one core focus, and that is making the cheapest green hydrogen possible.”

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Exclusive: Renewable fuels firm hires advisor for topco raise

A renewable fuels firm with operations in California has hired a bulge bracket bank to raise project and platform capital for new developments in the Gulf Coast.

Oberon Fuels, a California-based renewable fuels developer, has hired Morgan Stanley for a topco and project capital raise to launch soon, CEO Rebecca Bordreaux said in an interview.

The company, backed by Suburban Propane, plans to reach COD on its next facility in the Gulf Coast in 2026, Boudreaux said. Late last year the company hired its first CFO Ann Anthony and COO Derek Winkel.

Oberon produces rDME at its Maverick Innovation Center in Brawley, California and recently established a partnership with DCC Fuels focused on Europe.

The location of the Gulf Coast facility is not public, Bordreaux said, though the company aims to reach FID on it this year. When operational it would produce 45,000 mtpy of methanol, or a comparative amount of rDME. Capex on the facility is in the range of $200m.

The company is shifting toward production of methanol as a shipping fuel, she said. New opportunities also include using DME as a renewable hydrogen carrier, as the fuel is easily transportable and compatible with many existing logistical networks.

Oberon is also preparing to issue $100m of municipal bonds from the state of Texas, Bordreaux said.

More than $50m has been raised by the company to date, with Suburban Propane being the largest investor and customer in California, Bordreaux said. The company has a third project in the pre-FEED phase.

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