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HIF and Idemitsu Kosan sourcing eFuels from global facilities

HIF plans to start construction on a world-scale eFuels facility in Texas in 2024, and is developing additional facilities in the US, Chile, and Australia.

HIF Global and Idemitsu Kosan have formed a strategic cooperation agreement to accelerate the production of carbon neutral eFuels, some made with green hydrogen, according to a news release.

The strategic cooperation will focus on purchase of eFuels by Idemitsu from HIF eFuels facilities worldwide, co-investments in HIF eFuels facilities and new facilities in Japan, and supply of recycled carbon dioxide from Japan for use in the eFuels production process.

A signing ceremony was held in Tokyo.

The eFuels are meant to decarbonize existing cars, ships, and airplanes without any modifications to their engines. HIF’s facility at Haru Oni in Chile is producing carbon neutral gasoline.

“We expect to begin construction on the first world-scale eFuels facility in Texas in 2024, and we are developing additional facilities in Chile, USA, and Australia, which are all well placed to serve partners in Asia,” HIF CEO Cesar Norton said in the release. “Collaboration with companies with the global presence and resources of Idemitsu makes our plan to reach 150,000 barrels per day of eFuels production a reality.”

“[W]e believe that eFuels are one of the best ways to promote decarbonization of mobility by utilizing existing infrastructure, and we hope that eFuels will be widely recognized and used around the world as soon as possible.” Hiroshi Tanaka, Idemitsu General Manager said in the release.

The green hydrogen will be used together with recycled carbon dioxide to produce carbon neutral eFuels, which are chemically equivalent to fuels used today and can therefore be dropped-in to existing engines without any modifications.

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Blue Biofuels receives DOE grant

The DOE grant will enable Blue Biofuels to advance its efforts to scale and optimize its patented cellulose-to-sugar process.

Blue Biofuels, Inc. has received a Department of Energy (DOE) Small Business Innovation Research (SBIR) Phase 1 grant.

The grant, valued at $206,500, will further propel Blue Biofuels’ mission to revolutionize the biofuels sector and create sustainable transportation and aviation fuel.

The DOE SBIR Phase 1 grant will enable Blue Biofuels to advance its efforts to scale and optimize its patented cellulose-to-sugar (CTS) process. This funding will support the company’s team of scientists and engineers as they continue to refine cutting-edge fuel technology aimed at reducing carbon emissions and mitigating climate change.

“We are honored to be awarded the DOE SBIR grant, which recognizes our commitment to developing clean and sustainable fuels,” CEO Benjamin Slager said in the release. “This grant not only validates our ongoing efforts but also provides us with the resources needed to accelerate our research and move closer to commercialization.”

With this grant, Blue Biofuels aims to successfully complete its Phase 1 scaling objectives, paving the way for future opportunities to secure larger-scale grants. The Company is poised to leverage the findings and data generated from this project to pursue subsequent DOE SBIR Phase 2 & 3 grants, potentially worth millions of dollars. Blue Biofuels remains steadfast in its commitment to advancing the biofuels industry and ushering in a cleaner and greener energy landscape.

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Pattern Energy signs green ammonia LOI with Germany’s Mabanaft

As part of the LOI, Mabanaft also plans to evaluate the opportunity to potentially become a co-investor next to Pattern Energy and share ammonia and infrastructure expertise.

German Energy company Mabanaft has signed a letter of intent with US-based Pattern Energy to consider a potential transaction for the supply to Mabanaft of green ammonia.

The green ammonia would be produced by Pattern Energy at the Port of Argentia, in the Canadian province of Newfoundland and Labrador, starting in 2027, according to a news release.

The green ammonia production would require a new production facility with an estimated production capacity of 400 tonnes of ammonia per day. As part of the LOI, Mabanaft also plans to evaluate the opportunity to potentially become a co-investor next to Pattern Energy and share ammonia and infrastructure expertise. The green ammonia, produced with wind energy and hydroelectricity, is expected to make an important contribution to supplying industry in northern Germany and beyond with energy from renewable sources.

The LoI was signed by representatives of both companies at Mabanaft’s headquarters in Hamburg in the presence of the German Federal Minister for Economic Affairs and Climate Action Habeck, the Canadian Minister for Energy and Natural Resources Wilkinson and Hamburg’s Senator for Economic Affairs Leonhard. Habeck and a political delegation from Canada also visited Mabanaft as part of their jointly organised German-Canadian Hydrogen and Ammonia Producer-Offtaker Symposium in Hamburg on 18 March 2024. The delegation trip included visits to companies in Hamburg that are engaged in hydrogen production, hydrogen storage or hydrogen use.

Hamburg’s Senator for Economic Affairs Dr Melanie Leonhard: “The planned collaboration will bring energy from Canadian wind to Hamburg! In future, hydrogen and its derivatives are to be produced with wind energy in the windy region and then transported by ship to the German hydrogen capital, Hamburg. Thanks to the strong industry here, there is security of supply for the energy-intensive industries. Through cooperation between the Port of Hamburg and our Canadian partners, we will help to create the necessary infrastructure on the Canadian side.”

The “New Energy Gate” in Hamburg is also set to play a key role in Mabanaft’s planned imports of green ammonia. The planned New Energy Gate Hamburg is to become Mabanaft’s first major hub for the import, storage and processing of fuels from renewable energy sources. In November 2022, Mabanaft announced plans to build up an import terminal for green energy in the Port of Hamburg, with the US company Air Products as an anchor customer. Volker Ebeling, Senior Vice President New Energy, Supply and Infrastructure at Mabanaft, says: “We are absolutely convinced that hydrogen and its derivatives will play a key role in the energy supply of industrialised nations. The Letter of Intent we have signed today with Pattern Energy is a renewed commitment to this path.”

Cary Kottler, Chief Development Officer of Pattern Energy says: “Pattern Energy is thrilled to be working closely with Mabanaft on the further development of the Argentia Renewables project in Newfoundland & Labrador.  As a renewable energy leader in North America, Pattern Energy seeks to partner with energy industry leaders in Europe to fully develop the potential of green fuels production and export infrastructure in North America. The Argentia Renewables project is well positioned to be an early mover in the green hydrogen economy and will serve as an important element in Europe’s energy transition.”

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Hydrogen tech firm looking for distribution partners with eye on Series B

A Florida-based hydrogen technology company is hoping to find strategic partners with distribution networks as part of its impending Series A capital raise, with an eye on a much larger Series B later.

BoMax Hydrogen, the Florida-based hydrogen production technology firm, is searching for strategic partners with distribution networks as part of its soon-to-launch Series A capital raise, CEO Chris Simuro said in an interview.

BoMax, founded in 2014 and headquartered in Orlando, will launch a $15m Series A on November 1, Simuro said. The company has hired Taylor DeJongh to run the process, as recently reported by ReSource.

Greenberg Traurig is the company’s law firm, Simuro said. They use a regional accountant in Florida.

Taylor DeJongh is looking for three to five investors to put in between $3m and $5m each. BoMax is in discussions with French container shipping company CMA-CGM as a potential investor, he said.

“We are truly searching for distribution partners,” Simuro said, adding that company doesn’t envision itself touching the end-use customer.

The Series A funds should provide up to 24 months of runway and expand the company’s manufacturing capacity, Simuro said. A follow-on Series B capital raise will likely be $100m or more.

BoMax has raised some $5m to date, including from state government aerospace economic development agency Space Florida.

Funds from the Series A will be used to make a beta prototype, scale operations at the company’s labs in Orlando and prepare for commercial production.

No electrolysis

The company touts a novel technology making hydrogen from visible light without the need for solar electrolysis, according to a pre-teaser marketing document seen by ReSource. An alpha prototype has been awarded by the US Department of Energy.

Requiring a larger footprint, electrolysis can ultimately produce 38 liters of hydrogen per hour per square meter, Simuro said. BoMax believes it can reach 50 liters per hour in six months time.

“It replicates how hydrogen is made in the natural world,” Simuro said. “In order to do this globally, we are going to need partners.”

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Exclusive: Plug Power enlists bank to evaluate financing options

The cash-burning company is working with a bulge-bracket American bank to evaluate debt financing options to help stave off a liquidity crisis.

Plug Power is working with Goldman Sachs to evaluate a capital raise in the form of debt financing to shore up its balance sheet, sources said.

The New York-based company recently said it was at risk of a liquidity crisis in the next 12 months if it is not able to raise additional capital, noting it was exploring various options for bringing in financing.

Its total cash and cash equivalents as of September 30 stood at $567m, representing a decline of $580m for the quarter, according to SEC filings. The company also has nearly $1bn of restricted cash balances stemming from sale-leaseback transactions, of which $50m becomes available per quarter.

In a shareholder letter and on its 3Q23 earnings call, executives outlined the financing options that are on the table for the company, including a debt raise, funding from the Department of Energy’s Loan Programs Office, and bringing in project equity partners for its facilities.

The company is “evaluating varied debt financing solutions to support [its] growth,” according to the shareholder letter. CFO Paul Middleton added on the call that they’ve had “some expressions of offers for ABL-like facilities” as well as restricted cash advance facilities. 

CEO Andy Marsh said the company would need to raise between $500m – $600m, according to a news report from Barron’s.

Representatives of Plug Power and Goldman Sachs declined to comment.

Plug is also working towards a conditional commitment from the DOE Loan Program Office to finance plants in its green hydrogen network. 

“The framework that we’re working on with them is a $1.5bn platform that would fund our green plants and would fund from construction phase onwards,” CFO Middleton said, adding that the funding could amount to as much as 80% of the projects. 

Middleton said he expected the DOE loan, if granted, would start funding in early 2Q24, and could even be used to back lever some of its existing plants in Texas and New York.

The company’s stock traded today with a $2.34bn market cap, while its outstanding debt consists of a $200m convertible note issued in 2020.

The notes traded around 130 cents of par before Plug’s going concern announcement, and subsequently dropped to trade in the high-70s, with quotes this week in the 80s.

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Exclusive: TransGas CEO talks mega ammonia project

The owners of a proposed colossal ammonia production facility in Appalachian coal country are in the beginning stages of seeking liquidity, EPC contracting, and advisory services for a project they say will ultimately be financed akin to an LNG export terminal.

It’s an appeal often made in modern US politics – doing right by those left behind.

Perhaps no place is more emblematic of that appeal than West Virginia, and perhaps no region in that state more so than the southern coal fields. It’s there a fossil developer is proposing the architecture of the ruling coal industry be used to build a $10bn decarbonized ammonia facility and is gathering the resources to do so.

“It’s world class, and it makes southern West Virginia, Mingo County, the catalyst for the 21st century’s energy revival,” said Adam Victor, the CEO of TransGas Development Systems, the developer of the project. “The people [here] are the heirs and descendants of the people that mined the coal that built the steel that built the Panama Canal.”

The Adams Fork Energy project in Mingo County, jointly developed by TransGas and the Flandreau Santee Sioux Tribe, is slated to reach commercial operations in 2027. Six identical 6,000 mtpd ammonia manufacturing plants are being planned on the site of a previously permitted (but not constructed) coal-to-gasoline facility.

ReSource exclusively reported this week that the state has issued a permit to construct the facility. TransGas owns 100% of the project now, though if the Tribe comes through with federal funding then it will become the majority owner.

TransGas itself could take on a liquidity partner to raise up to $20m in development capital for the project, Victor said. The company is not using a financial advisor now but will hire one in the future.

White & Case is TransGas’ legal advisor. The company is in discussions with Ansaldo Energia, of Italy, about construction.

“The project is not averse to talking to private equity or investment bankers, because nothing has been decided right now,” Victor said, noting that the company is just beginning talks with infra funds and is eager to do so. “The project will be looking for an EPC.”

The first of the six plants will cost about $2bn, but each one will get successively less expensive, Victor said. Total capex is about $10bn, though there is discussion of acquiring adjacent land to double the size of the project – or 12 plants in all producing 6,000 mtpd each.

TransGas has the support of West Virginia politicians like Sen. Joe Manchin and Gov. Jim Justice, Victor said. Financing the project will be a function of the offtake.

Electricity for data centers, or ammonia for export?

The company is conducting a market analysis to determine avenues for offtake, Victor said. They could do partial electricity generation onsite to power a data center, with the remainder of the hydrogen being used to make ammonia for shipment overseas.

Depending on the needs of offtakers, the facility could also do one or the other entirely, he said.

The project, if configured at current size, could support about 6,000 MW of non-interruptible power generation, 2,000 MW of that for cooling.

“This could basically become a 6,000 MW campus to become the center of data centers in the United States,” Victor said, noting that the region is much less prone to natural disasters than some others and is high enough in elevation to escape any flooding. “I think we could rival Loudoun County [Virginia] as where data centers should be located.”

Adams Fork sits on the largest mine pool reservoir in the eastern US, Victor noted. Data centers need constant cooling, particularly new chip technology that requires liquid cooling.

TransGas will know in a matter of weeks if it’s going to go the electrical route, Victor said. There are only five companies in the world with data centers large enough to efficiently offtake from it: Amazon, Microsoft, Google, Meta and Apple.

If not, the facility will continue down the path of selling the decarbonized ammonia, likely to an oil company or international ammonia buyer like JERA in Japan.

Partnering with a tech company will make it easier to finance the project because of high credit ratings, Victor said. International pressure on oil companies could affect those credit ratings.

“We think the investor world could be split,” he said, noting tech and fuels investors could both be interested in the project. “You’re doubling the universe of investors and offtakers.”

He added: “Once we have the offtake, we think we could have a groundbreaking this year.”

Two ways of shipping

For ammonia production the facility could use the same shipping channels the coal industry uses – either to the Big Sandy River to be sent by barge on the Ohio to New Orleans, or rail to ports in Baltimore; Norfolk, Virginia; and Savanna, Georgia.

By rail, two 40-car trains per day would take ammonia to port. Norfolk Southern and CSX both operate in the region.

Another option is to have a fleet of 50 EV or hydrogen-powered trucks to transport ammonia to the Big Sandy where electric-powered barges can take it to the Gulf, Victor said. That latter option could mean a lower CI score because it will eliminate rail’s diesel power.

Mercedes-Benz and Volvo both make the kind of trucks used for this work in Europe and Asia, he said. Coal mines in the region use diesel trucks in fleets as numerous as 500, and the original TransGas coal plant was permitted for 250 trucks per day.

“This is something that our offtake partner is going to determine,” he said. Japan would likely want the ammonia in the Gulf of Mexico, whereas European shipping companies would want it on an Atlantic port.

The LNG financial model

The offtakers themselves could fund the facility, Victor said.

“The financial model for this is the financial model for funding LNG terminals,” he said. “The same teams that put those large facilities together, financial teams, would be the same teams that we’re talking to now.”

The offtakers may also dictate who they want to be the financial advisor, he said.

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AGDC seeks $150m in development capital for Alaska LNG project

The Alaska corporation is raising capital to reach FID on a $44bn LNG project that includes the construction of a natural gas pipeline and carbon capture infrastructure.

The Alaska Gasline Development Corporation (AGDC) is actively working to raise $150m in development capital for the Alaska LNG project, with Goldman Sachs providing advisory services.

This capital will cover third-party Front End Engineering Design (FEED) costs, project management, legal and commercial expenses, and overhead for 8 Star Alaska, the entity overseeing the project. Investors will receive a majority interest in both 8 Star Alaska and Alaska LNG as part of the fundraising efforts, according to a presentation​​.

AGDC, a public corporation of the state of Alaska, is hoping to finalize a deal for development capital in the next 12 months, but has not set a definitive timeline for the fundraise, AGDC’s Tim Fitzpatrick said.

The total cost of the project is estimated at $44bn, according to Fitzpatrick, and consists of three principal infrastructural components:

  1. Arctic Carbon Capture (ACC) Plant: Located in Prudhoe Bay on Alaska’s North Slope, this plant is designed to remove carbon dioxide and hydrogen sulfide before natural gas enters the pipeline.
  2. Natural Gas Pipeline: This 807-mile pipeline, with a 42-inch diameter, connects the ACC plant to the LNG facility and is capable of transporting 3.7 billion ft³/d of natural gas. It includes multiple offtake points for in-state residential, commercial, and industrial use.
  3. Alaska LNG Facility: Situated at tidewater in Nikiski, Alaska, this facility features three liquefaction trains, two loading berths, two 240,000 m³ LNG tanks, and a jetty. It is designed to produce 20 million tons per year of LNG​​.

Strategies to raise the necessary funds include collaborating with established LNG developers, strategic and financial investors, and possibly forming a consortium, according to the presentation. All project equity will flow through 8 Star Alaska, keeping the legal and commercial structure of the project consistent​​.

As of last year, the corporation was negotiating sales agreements for a significant portion of the Alaska LNG project’s capacity. Discussions include contracts covering 8 million tonnes per annum (MTPA) at fixed prices and market-linked charges, and equity offtake talks for up to 12 MTPA. Additionally, three traditional Asian utility customers have shown interest in a minimum of 3 MTPA, potentially increasing to 5 MTPA.

These negotiations involve traditional Asian utility buyers, LNG traders, and oil and gas companies, all credit-worthy and large-scale market participants, the company said. Some buyers are contemplating equity offtake, investing at the Final Investment Decision (FID) in exchange for LNG supplied at cost​​.

A key component of the project’s advancement is securing gas supply agreement terms, identified as a prerequisite by multiple investors. AGDC has held meetings with executives from two major producers to emphasize the need for Gas Supply Precedent Agreements to attract further investment. These discussions, highlighting the project’s importance to Alaska, were joined by key figures including the DOR Commissioner Crum, the DNR Commissioner Boyle, and representatives from Goldman Sachs​​.

The Japan Energy Summit, sponsored by AGDC, focused on the need for new LNG capacity in Asia. Japan’s Ministry of Economy Trade & Industry (METI) expressed strong support for new LNG investments and offtake, emphasizing the replacement of coal with gas in developing Asian markets​​.

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