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Heliogen appoints new CEO

Heliogen CFO Christie Obiaya will take over as CEO after Bill Gross was removed.

Heliogen, Inc., a provider of AI-enabled concentrating solar energy technology, yesterday announced that its board of directors has appointed Christie Obiaya as chief executive officer and added Obiaya to the board of directors, effective immediately.

Obiaya, head of Heliogen’s executive committee and formerly its chief financial officer, replaces Bill Gross, who was removed as CEO and has resigned from the board of directors, according to a news release.

The company, which trades on the NYSE, has been working to advance a hydrogen project in Lancaster, California, and another in Arizona.

“As Heliogen moves forward on commercial projects, Christie brings almost two decades of operational and financial experience, with degrees and a working background in both business and engineering,” said Robert Kavner, Heliogen’s lead independent director. “Having served as chief financial officer of Heliogen and chair of the executive committee, she is intimately familiar with our innovative renewable energy technology, our customers, and the priorities to drive our future success. This knowledge, together with her experience growing and managing energy and infrastructure development and sustainable technologies, make her the right person to take on these additional responsibilities. Christie, together with the rest of Heliogen’s management team, will focus on and advance the company’s strategic plan.”

Obiaya joined Heliogen in March 2021 as CFO and has worked closely with the company’s management team on commercializing its solar energy and thermal storage systems technology. Prior to joining Heliogen, Obiaya served as the head of strategy and chief financial officer for Bechtel Energy’s multi-billion-dollar, global energy business unit from 2017 to 2021. She also held various leadership roles at Bechtel in finance, strategy, project development, investment, and execution from 2010 to 2017. Prior to Bechtel, Obiaya worked on renewable energy projects in Kenya and India from 2008 to 2009.

“I am honored to have the opportunity to lead the company as we bring Heliogen’s renewable energy technology to customers looking to decarbonize their operations,” said Obiaya. “I look forward to bringing together Heliogen’s exceptional talent with our industry partners, and to delivering with excellence for our customers, employees, and stockholders.”

As part of the leadership transition, Kelly Rosser has been appointed interim CFO. Rosser has served as Heliogen’s chief accounting officer since August 2022.

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Verde Clean Fuels to develop lower carbon gas refinery in West Texas

The project would consume natural gas in the pipeline-constrained Permian Basin as feedstock, potentially mitigating the flaring of up to 34 million cubic feet of natural gas per day.

Verde Clean Fuels, Inc. and Cottonmouth Ventures LLC, a subsidiary of Diamondback Energy, have executed a Joint Development Agreement for the proposed development, construction, and operation of a facility to produce commodity-grade gasoline utilizing associated natural gas feedstock supplied from Diamondback’s operations in the Permian Basin.

The JDA provides a pathway forward for the parties to reach final definitive documents and Final Investment Decision for the proposed project, according to a news release. The JDA frames the contracts contemplated to be entered into between the parties, including an operating agreement, ground lease agreement, construction agreement, license agreement and financing agreements as well as conditions precedent to close, such as FID.

The expectation for the project is to produce approximately 3,000 barrels per day of fully-refined gasoline utilizing Verde’s patented STG+® process. By consuming natural gas in the pipeline-constrained Permian Basin as feedstock, the proposed project could demonstrate the ability to mitigate the flaring of up to 34 million cubic feet of natural gas per day, while also producing a high-value, salable product.

“The Verde Clean Fuels team is incredibly excited to finalize this JDA with Diamondback Energy with the goal to produce gasoline from natural gas in the Permian Basin,” said Ernie Miller, CEO of Verde. “This arrangement brings compounding economic and environmental benefits to West Texas. We believe that the ability to de-bottleneck midstream constraints along with the potential to reduce flaring of natural gas, while creating less carbon intensive gasoline, is of paramount interest to natural gas producers.”

“This agreement, with the first planned project in Martin County, fits perfectly with Diamondback’s strategy to decarbonize the oil field while ensuring a return for our investors,” said Kaes Van’t Hof, President of Diamondback. “Additionally, the scalability of the project is incredibly exciting, with similar natural gas-to-gasoline facilities possible across Diamondback’s locations in West Texas. We are proud to partner with Verde to bring this technology to the market.”

The proposed facility, which is to be located in Martin County, Texas in the heart of the Permian Basin, could serve as a template for additional natural gas-to-gasoline projects throughout the Permian Basin and other pipeline-constrained basins in the U.S., as well as address flared or stranded natural gas opportunities internationally.

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BlackRock investing $550m in Occidental DAC facility

BlackRock is investing in STRATOS, a DAC facility being developed by Occidental subsidiary 1PointFive.

Occidental said today that BlackRock will invest $550m on behalf of clients in the development of STRATOS, a direct air capture (DAC) facility, in Ector County, Texas.

Through a fund managed by its Diversified Infrastructure business, BlackRock has signed a definitive agreement to form a joint venture with Occidental through its subsidiary 1PointFive that will own STRATOS.

STRATOS is designed to capture up to 500,000 tonnes of CO2 per year.  Construction activities for STRATOS are approximately 30 percent complete and the facility is expected to be commercially operational in mid-2025. The project is expected to employ more than 1,000 people during the construction phase and up to 75 once operational.

“We are excited to partner with BlackRock on this transformative facility that will provide a solution to help the world reach net zero,” said Vicki Hollub, president and CEO, Occidental. “This joint venture demonstrates that Direct Air Capture is becoming an investable technology and BlackRock’s commitment in STRATOS underscores its importance and potential for the world. We believe that BlackRock’s expertise across global markets and industries makes them the ideal partner to help further industrial-scale direct air capture.”

“BlackRock is proud to partner with global energy leader Occidental to help build the world’s largest direct air carbon capture facility in Texas,” said Larry Fink, chairman and CEO, BlackRock. “Occidental’s technical expertise brings unprecedented scale to this cutting-edge decarbonization technology. STRATOS represents an incredible investment opportunity for BlackRock’s clients to invest in this unique energy infrastructure project and underscores the critical role of American energy companies in climate technology innovation.”

DAC is a technology that captures and removes large volumes of CO₂ directly from the atmosphere, which can be safely and securely stored deep underground in geologic formations. STRATOS is expected to provide cost-effective solutions that companies in hard-to-decarbonize industries can use in conjunction with their own emissions reduction programs. To date, 1PointFive has signed CO₂ removal credit purchase agreements with customers, including Amazon, Airbus, All Nippon Airways (ANA), TD Bank Group, the Houston Astros, and the Houston Texans.

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CB&I and Daewoo studying LH2 carrier and storage design

The companies will conduct a feasibility study of a liquid hydrogen carrier including an a storage tank design

CB&I, McDermott’s storage business line, and South Korea’s Daewoo Shipbuilding & Marine Engineering Co. (DSME), have signed a memorandum of understanding (MoU) for a feasibility study of a liquid hydrogen (LH2) carrier including an LH2 storage tank design, according to a news release.

CB&I will evaluate its LH2 storage tank design for ocean-going ships and DSME will investigate and develop the ship’s general design to install the LH2 storage tank. The output of the feasibility study is expected to contribute to the future design of a large-scale LH2 carrier.

CB&I spheres can store LH2 at temperatures of -423 degrees Fahrenheit and the company is nearing completion of the world’s largest LH2 sphere in Cape Canaveral, Florida.

The ability to ship large quantities of hydrogen across the ocean is an increasing need to help countries like South Korea achieve carbon reduction goals in a hydrogen economy.

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Brookfield-owned renewables developer planning hydrogen co-location

An IPP and developer of wind, solar and storage projects is in early discussions with potential partners to co-locate electrolysis with its operating assets and projects in development.

Scout Clean Energy, the Boulder, Colorado-based IPP and renewables developer, is laying the groundwork to co-locate electrolysis for green hydrogen with its wind and solar assets, CEO Michael Rucker said in an interview.

The company’s Power2X team is charged with looking for alternative strategies, Rucker said.

“We are actively trying to match project opportunities with the future hydrogen economy,” he said, noting that the company’s operating wind portfolio provides a crucial piece of that. “Wind is an especially good fit for hydrogen production just in terms of pricing.”

Scout, which is owned by Brookfield Renewable, sees itself as producing green electrons and doesn’t want to get into marketing and distribution of hydrogen, Rucker said.

Brookfield acquired Scout in 2022 for $1bn, with the potential to invest an additional $350m to support development activities.

Scout has its first solar project in development in ERCOT, a market where shipping of hydrogen would make for a promising project, Rucker said. The company has also looked at the Midwest, where a robust SAF production ecosystem is forming, as well as the Pacific Northwest.

The company is already working with one hydrogen developer to match production to one of its wind farms, Rucker said. An exact location has not been selected.

Pricing diligence has been promising, Rucker said. But the offtake market in the US remains slow to develop despite regulatory encouragement.

“The IRA has given us maybe the most subsidized hydrogen production market in the world but it’s really being production-driven not demand-driven, so we really need to see more of the economy using hydrogen,” Rucker said. “I trust that will come, it’s just going to take longer than we think.”

Scout is not ready to take anything to market related to hydrogen, but ultimately there will be a need for financial advisory, Rucker said.
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US hydrogen developer auditioning bankers

A US-based clean fuels developer has large capital needs for unannounced green hydrogen projects in California and Illinois, as well as an ammonia facility in Texas.

A US-based clean fuels developer has large capital needs for unannounced green hydrogen projects in California and Illinois, as well as an ammonia facility in Texas.

Avina Clean Hydrogen has yet to formally engage an investment banker to raise the equity and debt needed for a trio of projects under development in the US, CEO Vishal Shah said in an interview.

The company, which recently announced the formation of a strategic advisory board composed of executives from companies like Cummins, bp and Rolls Royce, will need $600m or more of debt and between $200m and $300m of equity, as previously reported by ReSource. Capital raising talks are focused on the operating company and project level.

Capital raises for Avina’s 700,000 mtpa green ammonia project in the Texas Gulf Coast and a larger operating company raise will launch next month, Shah said.

“The amounts that we are going to need to raise have gone up,” Shah said. “We are working with a number of banks but we’ve not engaged anyone formally.”

Buildout of the Texas project has been accelerated. The company recently announced an agreement with KBR for that project, which is scheduled to come online next year.

Project level capital has been raised for Texas and a green hydrogen project in Southern California, Shah said. An additional green hydrogen project in Illinois is in development as well.

Finding the renewable power

Renewable power needs for these facilities are big, but Shah said the company doesn’t see a shortage of power. Instead, developers are facing interconnection issues and subsequent cost increases.

Hydrogen developers in California are in many cases offering higher prices for renewable energy than other buyers, Shah said. The issue is that credit-worthy investment counterparties are often seen as more attractive offtakers regardless of the higher price offers from aspiring hydrogen producers.

“I would say California is different,” Shah said. “The offtake market is a challenge.”

There are renewables developers with a genuine interest in hydrogen looking at the sector as a long-term play, Shah said. But for some without a strategic interest in hydrogen, a community choice aggregator offering a 15-year offtake is more certain than a hydrogen developer offering a 10-year offtake; higher price can be seen as a trade-off.

“That’s the nature of the beast, right now.”

Regulatory uncertainty

Investors looking into the space are hesitating to deploy capital in some cases because of uncertainty around IRA clarifications, particularly with regards to the PTC qualifications, Vishal said.

“A lot of the customers, lenders, everybody’s waiting to make decisions,” Vishal said. Offtakers also have hesitations. “Nobody wants to sign long-term contracts in an environment where pricing is not clear.”

Shah said investors should look for offtake when investing in projects. Avina has two of three contracts signed for each of its projects.

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Exclusive: Hydrocarbon recycling firm raising pre-IPO equity

An early-stage company capturing and recycling CO2 from hydrocarbon engines in the northeastern US and Germany has hired an investment bank to help them with a public listing and is raising pre-IPO platform equity.

ESG Clean Energy, a Massachusetts-based carbon capture and recycling firm formed in 2016, plans to go public in 2025 but will first raise pre-IPO platform equity, CEO Nick Scuderi said in an interview.

ESG Clean Energy will change its name in a re-brand and has hired an investment bank to help with the IPO, which does not yet have a targeted quarter, Scuderi said. He declined to name the advisor.

After the name change but prior to the public listing, ESG is seeking to raise between $20m and $40m in platform equity, he said. The company is interested in a traditional IPO, not a SPAC or private debut opportunity.

Angel investors have backed the company to date, with some $40m total raised, Scuderi said. He owns a controlling stake in the company.

Power, water and CO2

ESG Clean Energy, billed as a thermal dynamics and fluid mechanics engineering company, has patented technology for use in fossil combustion engines – both piston-driven engines and bottoming cycles (secondary thermal dynamic waste-to-energy systems). Exhaust is treated to produce CO2 and water.

The technology is commercialized, producing power at a facility in Holyoke, Massachusetts under a 5 MW/20-year PPA with Holyoke Gas & Electric. The 5,000 square-foot plant in the city proper has two Caterpillar G3520 natural gas engines each producing 2 MW of power running on natural gas during peak hours.

The waste-heat from Holyoke One is used to create commodities, including distilled water.

“What we have is a design, a system, where we utilize our technology to separate the water from the exhaust,” Scuderi said. “We can utilize this technology in any power plant in the US that’s running on natural gas.”

In arid regions, the distilled water aspect has obvious potential. The Holyoke One facility makes up to 14,000 gallons of distilled water per day, Scuderi said.

The system is also applicable in ICE engines, Suderi said. The company has been in discussions with auto manufacturers to license ESG’s IP; he declined to name which auto companies.

The CO2 is sold to offtakers who do not re-emit it into the atmosphere, such as cannabis growers and CO2 beverage makers. ESG is also able to sell carbon credits.

Bankable opportunities in the US and Germany

Holyoke One, at a cost of $20m, can be replicated throughout the US and, post-IPO, ESG has eyes on power projects in New England, California and Florida, Scuderi said.

Power plants that produce from 100 MWh to 200 MWh will cost between $400m and $450m, and each of those projects will be set up as a separate LLC, Scuderi said. The demand is particularly large in powering data storage.

“We have different [investment] funds that are very large that are willing to put up the money” to fund the projects, Scuderi said. “It’s bankable because the power sales agreement is tied to a data storage company that’s triple-A rated.”

Data-heavy geographies like Virginia are targets for this kind of development, and ESG plans to sharpen its focus on these projects, as well as project finance efforts, following the IPO.

Now, the company has six large scale projects in development in Germany, including one advanced project serving a cloud computing offtaker in the Berlin area, needing 150 MW to 200 MW of power per hour, Scuderi said.

“In Germany, we’re very far along with getting power sales agreements,” he said. “Once we deploy this technology in one location, the world’s going to want it.”

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