Project finance, Project news, Raising capital, Regulatory

Grön Fuels’ massive Louisiana fuels project delayed 2 years

Commercial operations for the project are now expected in 2027 compared to 2025 previously, an executive told a local newspaper.

April 24, 2024

Fidelis New Energy’s plans to build a massive renewable fuels complex at the Port of Greater Baton Rouge have been delayed by two years.

The project, known as Grön Fuels, is a $9.2bn, 65,000 barrel per day renewable fuels facility producing sustainable aviation fuel, renewable diesel, renewable naphtha, and renewable propane as low carbon transportation fuels, according to the firm’s website.

The developer had said in a 2021 press release that Fidelis expected to achieve final investment decision in 2021. However an executive from Fidelis told local Louisiana newspaper that the firm is still working toward a final investment decision as it waits for final rules regarding the IRA.

“We now have a build-out path that enables the start of the construction and independent operations of the [sustainable aviation fuel] production portion of Grön Fuels while enabling the additional values of the FidelisH2 technologies to be added after the IRA rules that impact them are finalized,” Fidelis COO Bengt Jarlsjo wrote to the Greater Baton Rouge Business Report.

Commercial operations for the project are now expected in 2027 compared to 2025 previously, the executive told the newspaper.

Jarlsjo did not respond to a request for an interview from ReSource.

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Personnel moves

Mitsubishi Hydrogen Infrastructure appoints president and CEO

Michael Ducker has been appointed president and CEO of Mitsubishi Hydrogen Infrastructure.

Ducker was previously senior vice president and head of hydrogen infrastructure at the firm, a post he held since 2022. He has also been chief operating officer of the ACES Delta hydrogen project in Utah since 2020, according to his LinkedIn profile. He joined Mitsubishi in 2012.

Mitsubishi Hydrogen Infrastructure is a wholly owned subsidiary of Mitsubishi Power Americas and a Group Company of Mitsubishi Heavy Industries (MHI), with the aim of providing high-quality solutions and projects to customers and partners as an established business in the clean hydrogen market while simultaneously enabling greater agility to keep pace with a rapidly evolving and dynamic hydrogen market.

April 2, 2024

Project finance, Project news, Raising capital

Air Products gets board approval for expanded LA blue hydrogen complex

The company has expanded the scope and expected cost of the project, which now stands at $7bn. It is considering a project finance model to build the facility.

Air Products has received final investment approval for an expanded scope and cost of its planned blue hydrogen energy complex in Louisiana, with the cost growing to $7bn from $4.5bn previously, CEO Seifi Ghasemi said today.

Pennsylvania-based Air Products unveiled the project in October 2021. At an expected cost of $4.5bn, the complex as announced would have produced more than 750 million standard cubic feet per day of blue hydrogen for Air Products’ pipeline customers in the US Gulf Coast and for global hydrogen markets.

The Inflation Reduction Act was passed while planning for the facility was underway. Meanwhile, additional support for hydrogen in Europe and Japan led the company to consider future expansion at the Louisiana project.

“It is important that we pre-invest in the infrastructure needs for future expansion now, so that when the demand increases rapidly, as we expect it to, we will be able to bring the next phase of this project on stream as fast as possible,” Ghasemi said.

Beyond the increased scope of the project, costs have gone up due to inflation over the last three years as well as future inflation. The company is also including funds to cover the interest on capital used to build the plant.

The largest bucket of the $2.5bn increase is inflation, at about $1bn, Ghasemi said in response to a question.

Project finance

As the company signs long-term contracts to sell the resulting products from the Louisiana facility, the company will consider – as it did with the precedent-setting NEOM green hydrogen facility – levering the project, leading to cash outflows for the project of between $2bn – $3bn to fund the company’s equity portion.

“We have the capacity to spend our own cash, but we would rather project finance these projects so that we have more cash for future projects,” Ghasemi said.

“We see significant demand for the product that this plant will produce,” he said.

Ghasemi expects to garner a premium for the clean products that will allow for a double-digit return, with a presentation noting a greater than 10% IRR on the project.

November 7, 2023

Project finance, Project news, Raising capital, Regulatory

Mexico methanol project to use local wastewater

Transition Industries has agreed with local water authorities to use wastewater for a green and blue methanol facility in Sinaloa, Mexico.

Transition Industries LLC announced that it has signed a multi-year agreement with the Ahome Municipality’s Drinking Water and Sewage Board (JAPAMA) to use municipal wastewater for all water resource needs for its Pacifico Mexinol project, a 6,145 MT per day methanol production facility near Topolobampo, Sinaloa, Mexico.

When it initiates operations, Pacifico Mexinol, is expected to be the largest single ultra-low carbon methanol facility in the world – producing approximately 300,000 MT of green methanol from captured carbon and green hydrogen, and 1.8 million MT of blue methanol annually from natural gas with carbon capture, according to a news release. Furthermore, the water solution is expected to be the world’s largest application of industrial water reuse from municipal effluent.

Pacifico Mexinol’s purpose-driven water strategy, designed in partnership with JAPAMA, will allow the facility to completely avoid impacting the Bay of Ohuira. Instead of using seawater and other natural sources of water – which could compete with local agriculture, industrial, commercial and/or residential freshwater needs – Mexinol’s water solution uses municipal wastewater which will be treated and recycled back to the municipal wastewater facility. This closed loop water system will also prevent more than 12 million tons per annum of wastewater being disposed of into the Bay of Ohuira.

Pacifico Mexinol will pay JAPAMA a tariff per cubic meter of wastewater as determined by state law, thus enabling JAPAMA to commercialize its wastewater and strengthen its financial position. The agreement also includes upgrades and improvements to JAPAMA’s water treatment facility.

Rommel Gallo, the CEO of Transition Industries, commented: “We are pleased to have developed a sustainable water solution in partnership with JAPAMA that is not only a model for how to address climate change head-on but also shows how industry and government can work together for sustainable solutions, benefiting both the community and business.”

Transition Industries’ mission is to actively participate in the transition to a low-carbon world by leveraging technology and innovation to produce methanol safely and efficiently while minimizing any negative environmental and social impacts.

“Years of community and municipal engagement has led to the development of a set of purpose-driven design solutions, like our wastewater strategy, aligned with our core values. We will not impact the Bay; our facility is Net Zero to avoid pollution; we use clean and renewable energy; and we promote economic development aligned with the interests of communities,” says Tom Roche, Head of ESG for Transition Industries.

Pacifico Mexinol is expected to reach FID in 2024 and commercial operations in late-2027 to early-2028. The project will generate a significant number of local jobs during construction and operations.

April 24, 2024

M&A, Raising capital

Exclusive: Additional details revealed on e-fuels equity raise

A US e-fuels developer is in the midst of a Series C raise with BofA Securities advising.

E-fuels developer Infinium is raising $300m in a Series C capital raise that launched last year, according to a source familiar with the matter.

BofA Securities has been engaged to advise on the process, as previously reported by ReSource. The amount of the capital raise was not previously reported.

Infinium and BofA did not respond to requests for comment.

Infinium recently announced the existence of Project Roadrunner, located in West Texas, which will convert an existing brownfield gas-to-liquids project into an e-fuels facility delivering products to both US and international markets. Breakthrough Energy Catalyst has contributed $75m in project equity.

Infinium, which launched in 2020, closed a $69m Series B in 2021, with Amazon, NextEra and Mitsubishi Heavy Industries participating. Its Project Pathfinder in Corpus Christi is fully capitalized.

About a dozen projects, split roughly 50/50 between North America and the rest of the world, are in development now. The company is always scouting new projects and is looking for partners to provide CO2, develop power generation and offtake end products, an executive said previously.

A CO2 feedstock agreement for a US Midwest project with BlackRock-backed Navigator CO2 Ventures was recently scrapped after the latter developer cancelled its CO2 pipeline project.

January 30, 2024

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Project news

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.

October 27, 2022

exclusive

M&A, Project news

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.

July 19, 2023