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Gulf Coast Ammonia hydrogen plant comes onstream

The Air Products plant providing hydrogen to the Gulf Coast Ammonia facility has come onstream.

Air Products executives today said the plant providing hydrogen to Gulf Coast Ammonia has come onstream and is generating revenues.

Pennsylvania-based Air Products invested $500m into the steam methane reformer and hydrogen pipeline capacity, as well as an air separation unit for nitrogen and a steam turbine unit for the GCA world-scale ammonia plant.

Lotus Infrastructure and Mabanaft GmbH own the GCA facility and provided equity for the project. The project financing closed on December 30, 2019.

Jefferies last year was leading a sale of the plant, which was paused until it reached commercial operations. An official at Lotus did not immediately respond to a request for comment.

The approximately 175 million standard cubic feet per day (mmscfd) SMR built by Air Products will include the addition of over 30 miles of hydrogen pipeline from Texas City to Baytown, to be connected to its Gulf Coast Pipeline system, the company announced previously. The GCA project will use approximately 270 mmscfd of hydrogen from the SMR and Gulf Coast Pipeline. 

GCA’s ammonia facility, which will produce approximately 3,600 metric tons per day of ammonia, will also receive Air Products’ supply of approximately 90 mmscfd of nitrogen from a new ASU to be built and operated at the Texas City site.

While the hydrogen plant is onstream, Air Products CEO Seifi Ghasemi today declined to comment on the ammonia portion of the project, saying he’s like the owners of that facility to make a statement if necessary.

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Ares acquires RNG developer

Ares has made a strategic investment to acquire RNG developer Dynamic Renewables in a process run by Lazard.

Dynamic Renewables, a full-service developer, owner and operator of waste management and anaerobic digestion renewable fuel projects across the U.S., has been acquired by fund managed by Ares Management’s Infrastructure Opportunities strategy, according to a news release.

In addition, an unregulated affiliate of NorthWestern Energy has acquired a small minority stake in the company.

Terms of the deal were not disclosed. Lazard acted as financial advisor to Dynamic on the transaction. Husch Blackwell served as legal counsel to Dynamic. Latham & Watkins LLP served as legal counsel to Ares.

The investment from Ares is intended to support Dynamic in the further development and construction of its broader pipeline of renewable natural gas (“RNG”) assets located throughout the U.S. Ares has approximately $14.9bn in infrastructure equity and debt assets under management as of March 31.

Founded in 2011, Dynamic is a leading fully integrated origination, development, financing and operations platform that provides waste recovery solutions focused on the dairy and food processing industries. Dynamic has a material project development pipeline and is currently overseeing the construction of six assets, which are expected to be operational by the end of 2023 and forecasted to generate a combined total of more than 4,000 MMBtu per day of renewable natural gas. These six projects are projected to mitigate more than 300,000 metric tons of carbon dioxide emissions per year.

Dynamic is also the owner of BC Organics, a flagship asset developed by the Company. Located in Brown County, Wisconsin, BC Organics is a large-scale biorefinery facility that sources dairy manure feedstock from eleven multigenerational farms and comprises sixteen anaerobic digester tanks capable of processing 900,000 gallons of manure per day. BC Organics will produce carbon negative transportation fuel and provide its partner dairy farms with a long-term, sustainable manure management solution that converts the feedstock into clean water and reusable animal bedding.

Dynamic is led by its co-founders – Chief Executive Officer Duane Toenges, Chief Technology Officer Dan Nemke and Executive Vice President of Special Projects Karl Crave – who have worked together in the anaerobic digestion industry for nearly two decades.

“We are excited about the business we have built in Dynamic and our current momentum,” said Toenges. “Ares brings a wealth of experience in investing and developing projects in the renewable natural gas industry. They have expressed their support for the Company and our strategy in achieving our next phase of growth. Further, the recent commissioning of our BC Organics project is a tremendous milestone for Dynamic, and we look forward to completing additional projects this year for our strategic partners.”

“We are thrilled to partner with Dynamic, and our investment is aligned with Ares’ commitment to accelerate the transition to a lower-carbon economy through the Company’s innovative waste management and anaerobic digestion capabilities,” said Andy Pike, partner and co-head of Ares Infrastructure Opportunities. “Dynamic has a demonstrated track record of leadership in the rapidly growing renewable fuels sector, and we look forward to working together to build out its pipeline while supporting local communities in delivering more sustainable waste management practices.”

“We are pleased to further our existing relationship with Dynamic with this minority investment in the Company,” said Brian Bird, president and chief executive officer of NorthWestern. “The investment in Dynamic is a positive step for NorthWestern in meeting its net zero goals and a great opportunity to expand the RNG production capabilities of our service territory and its surrounding area. We are excited about the growth of the RNG industry, the carbon negative fuel that Dynamic’s assets will generate, and the complementary nature of this investment with our long-term goals.”

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Energy Impact Partners closes decarbonization fund at USD 485m

The fund has already invested in 12 companies, including: Form Energy, Nitricity, Carbon America, Sublime Systems, Electric Hydrogen and Rondo Energy.

Energy Impact Partners has closed the EIP Deep Decarbonization Frontier Fund I LP, oversubscribed with global investor support, at $485m, according to a press release.

The fund will invest in climate technologies, focusing on companies that have achieved early technical validation but have not yet reached maturity at scale. It has already invested in 12 companies, including: Form Energy, Nitricity, Carbon America, Sublime Systems, Electric Hydrogen and Rondo Energy.

The investment in Electric Hydrogen was joined by Breakthrough Energy Ventures, Capricorn Technology Impact Fund, and Prelude Ventures.

Founded in 2015, EIP has enabled more than 350 contracts, more than $1bn in bookings and business to a portfolio of 100+ companies.

Including this fund, EIP has raised more than $3bn and saw the majority of existing strategic investors commit to the Frontier Fund, adding to a diverse LP base comprised of corporates, banks, sovereign wealth funds, family offices, high net worth individuals and foundations from North America, Asia and Europe.

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First Citizens finances acquisition of ammonia carrier

The financing supports Purus Clean Energy’s acquisition of the MV Green Power, a 40,000 cbm ammonia carrier.

The Maritime Finance group of First Citizens Bank has provided financing to Purus Clean Energy to support the acquisition of the MV Green Power, a 40,000 cbm ammonia carrier, according to a news release.

Purus Marine, the parent of Purus Clean Energy, provide slow-carbon maritime energy transportation and infrastructure systems. The company has a fleet of more than 50 low-carbon vessels in the offshore wind, LNG, ammonia, logistics and ferry sectors.

Maritime Finance, part of First Citizens’ CIT division, offers customized solutions for secured loans to a global client base of vessel owners and operators.

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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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exclusive

Green hydrogen developer raising capital for projects

Fusion Fuel, a green hydrogen developer based in Portugal, has engaged an advisor and is in talks with investors to raise capital for projects in North America.

Fusion Fuel, a green hydrogen developer based in Portugal, has engaged an advisor and is in talks with investors to raise capital for projects in North America.

The company is working with RBC Capital Markets as financial advisor, Fusion Fuel Co-Head Zachary Steele said in an interview, and expects to produce infrastructure-type returns on its projects.

For its first project in the U.S., Fusion Fuel has agreed to a JV with Electus Energy to build a 75 MW solar-to-hydrogen facility in Bakersfield, California.

The project will produce up to 9,300 tons of green hydrogen per annum including nighttime operation and require an estimated $180m in capital investment, with a final investment decision expected in early 2024 and commissioning in the first half of 2025.

The combination of green hydrogen and solar production incentives along with California’s low carbon fuel standard make the economics of the project attractive, Steele said.

“Hydrogen is selling for up to $15-$18 per kilogram in California in the mobility market, and we can produce it at around the low $3 per kilogram area, so that leaves a lot of room for us to make a return and reduce costs for customers,” he said.

The company sells electrolyzer technology for projects but also serves as a turnkey developer. The technology consists of Hevo-Solar, which utilizes concentrated solar power to create hydrogen; and Hevo-Chain, a centralized PEM electrolyzer powered by external electricity.

Fusion Fuel’s proposition is that its smaller-scale technology – of 25 kW per unit –  is ready to use now, and can be dropped into places like a gas station in New York City, Steele said.

“This allows customers to scale into hydrogen and makes it available on site, compared with the massive projects going up in Eastern Canada or the Gulf Coast that require customers to commit significant capital to underwrite large scale projects,” he added.

Along with Electus, Fusion Fuel has already entered into a land-lease agreement for 320 acres in Kern County, California for the Bakersfield development. Black & Veatch will perform a concept study while Cornerstone Engineering and Headwaters Solutions are also engaged.

Iberian pipeline

The company targets to have EUR 40m of revenues in 2023, with a third of that coming from tech sales and the balance coming from Fusion Fuel-owned development projects.

Its revenue pipeline for next year is focused on the Iberian peninsula, and has been largely de-risked with the company having secured grants, with land and permitting underway.

In addition to the electrolyzer sales, the company, together with its partners, can provide turnkey projects that include engineering, procurement of the balance of plant equipment, construction of the facility, and operations, Steele said on an investor call this week.

“This allows us to not only make returns on the tech sale but also on the overall project and potentially recurring revenue from operations,” he said.

The company plans to use projects it is building in Portugal to expand into other core markets, beginning with a focus on mobility opportunities and targeted industrial decarbonization projects. Starting in 2024 the company plans to extend its reach further into North America and also Italy.

U.S. focus

Similar to other international hydrogen players, the passage of the Inflation Reduction Act caused a strategic shift of focus to the U.S. and accelerated Fusion Fuel’s plans to grow its business there, company executives said.

Notably, since Fusion Fuel will use its own technology in the projects it is seeking to develop, a required amount of that technology will need to be manufactured in the U.S. in order to qualify for the full benefits provided in the IRA.

As such, Fusion Fuel is scouting for a location to build one, or possibly two, manufacturing facilities in the U.S.

“The size of the Bakersfield project alone justifies building a new manufacturing facility,” Steele said on the investor call.

Steele was previously CEO of Cedar LNG, a floating LNG development in British Columbia, prior to exiting to Pembina. He works alongside Fusion Fuels Co-Head & CFO, Frederico Figueira de Chaves, who is based in Portugal.

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exclusive

Gas-fired peaker sale touts hydrogen blend potential

An equity process for 25% ownership of a California peaker plant includes plans to blend up to 30% hydrogen as part of the sales pitch, according to a teaser.

An opportunity to acquire 25% of the Sentinel Energy Center in California includes decarbonization initiatives like blending 30% hydrogen and installation of on-site battery storage, according to two sources familiar with the matter.

Project Oasis is being run by CIBC, the sources said. Voltage Finance, an entity managed by Guggenheim Partners Investment Management, is exploring the sale of its 25% indirect equity interest in the 850 MW generating facility in Riverside County.

The facility has more than 75% of its capacity contracted through 2027, according to a teaser seen by ReSource. The potential to execute a long-term green hydrogen offtake contract on several of Sentinel’s turbines is being evaluated.

“Sentinel is pursuing the implementation of hydrogen blending capabilities and has advanced the engineering and design through an agreement with a global OEM with beta testing expected in Q1 2025,” the document states.

Sentinel is also co-located with 15 MW of battery storage.

Guggenheim and CIBC did not respond to requests for comment.

Diamond Generating holds a 50% stake in Sentinel. The remaining 25% interest is owned by California-based fund manager Climate Adaptive Infrastructure (CAI), which bought its stake from Partners Group last year.

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