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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.

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World Energy GH2 and Vortex Energy to explore cavern storage

The parties will study cavern storage solutions in Newfoundland and Labrador, Canada.

Vortex Energy Corp. and World Energy GH2 have agreed, by way of a memorandum of understanding, to explore green energy cavern storage solutions in Newfoundland and Labrador, according to a news release.

The MOU was signed in Rotterdam, Netherlands at the Canadian Pavilion during the World Hydrogen Conference.

Recognizing the immense potential of Newfoundland and Labrador as a hub for renewable energy development, World Energy and Vortex have agreed to leverage their collective expertise, resources, and technologies in the pursuit of sustainable energy storage solutions.

Paul Sparkes, CEO of Vortex Energy Corp said, “This MOU marks a significant step towards meeting our shared goal of bolstering the province’s green energy economy and ensuring long-term energy security. We are extremely excited about the next steps.”

Both companies are committed to driving innovation and fostering the development of the infrastructure necessary for the widespread adoption of green energy solutions in Newfoundland and Labrador. Through collaborative research, development, and deployment initiatives, World Energy GH2 and Vortex Energy Corp intend to work together to study and explore scalable and efficient storage solutions.

Sean Leet, CEO of World Energy GH2, commented, “We look forward to working with Vortex Energy in the development of the Green Hydrogen industry in Newfoundland and Labrador. There are many opportunities for collaboration as the development of energy storage is further evaluated. Vortex has been a proactive partner and we are pleased to be working with them in our project area.”

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Exclusive: Ontario power producer takes FID on green hydrogen project

An Ontario power producer has taken a final investment decision on the province’s largest green hydrogen project to date.

Ontario Power Generation subsidiary Atura Power has taken a final investment decision on its hydro-powered Niagara Hydrogen Center, a 20 MW green hydrogen project in Niagara Falls, Ontario.

Construction on the 2,000-tonnes-per-year project is slated to commence early this year, with operations expected for 2025, company spokesperson Darius Sokal confirmed in an email.

The Ontario provincial government provided CAD 4.1m to support blending of the project’s hydrogen with natural gas to produce electricity at the Halton Hills Generating Station. The total cost of the blending demonstration effort is CAD 12.6m, according to documentation.

The province also supported the project by providing an exemption from the Gross Revenue Charge from 2024 to 2033 for electricity generated at the Sir Adam Beck Generating Station used specifically for hydrogen production under prescribed conditions. 

Additional financial terms were not immediately available.

In addition to natural gas blending, hydrogen from the project will go into Ontario’s wider fuels ecosystem. “We are looking forward to being able to provide alternative energy for vehicles such as Class-A trucks, regional transit authorities, forklifts, medium duty vehicles, etc.,” Kelly Grieves, director of hydrogen business, told The Niagara Independent.

Cummins is supplying four 5 MW electrolyzers to the project, built at the OEM’s Mississauga, Ontario facility.

CEM Engineering and Sacré-Davey Engineering were selected as Owner’s Engineering Representative for the design, permitting, and equipment selection of the project.

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LSB Industries outlines blue ammonia project economics

US fertilizer producer LSB Industries gives a glimpse at the economics of two in-development blue ammonia projects.

LSB Industries estimates its Houston Ship Channel blue ammonia project will add approximately $150m of EBITDA annually, CEO Mark Behrman said today.

The facility, which would produce approximately 1.1 million metric tons of ammonia and capture and sequester 1.6 million metric tons of CO2 annually, is currently in the pre-FEED phase and planned for construction on the Vopak Exolum Houston Ship Shuttle Ammonia Terminal.

Behrman gave a back-of-the envelope estimate assuming the cost of the facility would come in at $800m, resulting in the added $150m of annual EBITDA .

“If you could tell me what the cost is, we’re only in pre-FEED now, but if we used an $800m cost, and I’m not suggesting that that’s the cost, I think we really need to go through our engineering, and we look at the types of returns that we would want, I would guess that for a very stable and steady stream of income, it’s probably somewhere in the neighborhood of $150 million annually,” Behrman said.

Oklahoma-based LSB will use a project finance model to fund the project, the company previously said, giving estimates of between $500m – $750 for the cost.

LSB expects initial offtakers based out of Japan and Korea, but Behrman said today that, more recently, “we have had conversations with potential European offtakers and are encouraged as we now believe Europe to be a viable target market as well.”

The company is developing the facility in partnership with INPEX, Japan’s largest E&P company, and plans to build and operate an ammonia synthesis loop using low-carbon hydrogen produced by Air Liquide, who will also handle the carbon capture and sequestration as well as the nitrogen supply.

El Dorado

Meanwhile, LSB expects to add up to $20m of EBITDA per year from the installation of a carbon capture unit at its ammonia facility in El Dorado, Arkansas.

LSB has partnered with Lapis Energy on the project, which will capture and sequester 450,000 metric tons of CO2 per year from El Dorado’s ammonia production. Lapis will receive 45Q tax credits of $85 per ton of CO2 sequestered and pay a fee to LSB for each ton.

In turn, LSB will produce 375,000 tons of low-carbon ammonia that can be sold at a premium, executives said on an investor call today.

“All combined, this should equate to an estimated 15 to $20 million in annual incremental EBITDA for LSB,” CEO Mark Behrman said.

“The main gating factor is the approval of our Class VI permit application from the EPA that will enable Lapis to begin construction and then capturing and permanently sequestering,” he said. Indications from the EPA are that they are on track to issue the permit during 2025, he added.

At the same time, LSB elected to delay the expansion of production capacity at the El Dorado facility citing commodity market conditions, planned turnarounds and other initiatives the company has underway.

The El Dorado expansion project has been selected to receive funding under the USDA Fertilzer Production Expansion Program, a financing element under which LSB expects to have five years to complete the project once approved for the grant.

LSB previously paused a green ammonia project planned for Pryor, Oklahoma, citing lower gas prices, higher power prices, and uncertainties around tax credit incentives under 45V that created conditions favoring blue ammonia projects.

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Waste-to-energy company interviewing advisors for strategic capital raise

Vancouver-based Klean Industries plans to run a process to raise between $250m – $500m of capital to deploy into projects, some of which would use green hydrogen to upgrade recovered fuel and pyrolysis oils.

Waste-to-energy specialist Klean Industries is interviewing financial advisors and planning to run a process to find investors for a strategic capital raise.

The Vancouver-based company is seeking to raise between $250m – $500m in a minority stake sale that would value the company around $1bn, Klean CEO Jesse Klinkhamer said in an interview.

Klean had previously intended to list on the NASDAQ exchange but those plans were nixed due to the COVID-19 pandemic, he said. The company still plans to list publicly in 2024 or 2025.

Proceeds from a capital raise now would be used to “rapidly deploy” into the projects that Klean is advancing around the globe, Klinkhamer said.

For one of those projects – a flagship tire pyrolysis plant in Boardman, Oregon – Klean is raising non-recourse debt to finance construction, the executive said. Klinkhammer declined to name the advisor for the project financing but said news would be out soon and added that the company has aligned itself with infrastructure funds willing to provide non-recourse debt for the facility.

The Boardman project, which is expected to cost roughly $135m, is an expansion of an existing site where Klean will use its advanced thermal conversion technology to recover fuel oil, steel, and refined carbon black from recycled tires. The end products are comparable to virgin commodities with the exception of being more cost-effective with a lower carbon footprint.

“A lot of what we do is of paramount interest to a lot of the ESG-focused infrastructure investors that are focused on assets that tick all the boxes,” Klinkhamer said, noting the consistent output of the waste-to-energy plants that Klean is building along with predictable prices for energy sourced from renewable power.

Klean has also partnered with H2Core Systems, a maker of containerized green hydrogen production plants, and Enapter, an electrolyzer manufacturer. The company will install a 1 MW electrolyzer unit at the Boardman facility, with the green hydrogen used to upgrade recovered fuel oil and pyrolysis oil into e-fuels that meet California’s Low Carbon Fuels Standards.

“We were exploring how we could improve the quality of the tire pyrolysis oil so that it could enter the LCFS market in California,” he said, “because there are significant carbon credits and tax incentives associated with the improved product.”

The company received proposals from industrial gas companies to bring hydrogen to the Boardman facility that were not feasible, and Klean opted for producing electrolytic hydrogen on site in part due to the abundance of low-cost hydroelectric power and water from the nearby Columbia River.

Addressable market

Discussing Klean’s addressable market for waste-to-energy projects, Klinkhamer points to Japan as an example of a comparable “mature” market.

Japan, an island nation of 126 million people, has built roughly 5,000 resource recovery, waste-to-energy plants of various scopes and designations, he notes. For comparison, the United Kingdom – another island nation of 67 million people – has just 20 waste-to-energy plants.

“The opportunity for waste-to-energy in the UK alone is mind boggling,” he said. “There are a thousand opportunities of scope and scale. Nevermind you’ve got an aging, outdated electrical infrastructure, limited landfills, landfill taxes rising – a tsunami of issues, plus the ESG advent.”

A similar opportunity exists in North America, he noted, where there are around 100 waste-to-energy plants for 580 million people. The company is working on additional tire, plastic, and waste-to-energy projects in North America, and also has projects in Australia and Europe.

Hydrogen could be the key to advancing more projects: waste-to-energy plants have typically been hamstrung by a reliance on large utilities to convert energy generated from waste into electricity, which is in turn dependent on transmission. But the plants could instead produce hydrogen, which can be more easily and cost effectively distributed, Klinkhamer said.

“There is now an opportunity to build these same plants, but rather than rely on the electrical side of things where you’re dealing with a utility, to convert that energy into hydrogen and distribute it to the marketplace,” he added.

Hydrogen infrastructure

Klinkhamer says the company is also examining options for participating in a network of companies that could transform the logistics for bringing feedstock to the Boardman facility and taking away the resulting products.

The company has engaged in talks with long-haul truckers as well as refining companies and industrial gas providers about creating a network of hydrogen hubs – akin to a “Tesla network” – that would support transportation logistics.

“It made sense for us to look at opportunities for moving our feedstock via hydrogen-powered vehicles, and also have refueling stations and hydrogen production plants that we build in North America,” he said.

Klean would need seven to 12 different hubs to supply its transportation network, Klinkhamer estimates, while the $350m price tag for the infrastructure stems from the geographic reach of the hubs as well as the sheer volume of hydrogen required for fueling needs.

“With the Inflation Reduction Act, the U.S. has set itself up to be the lowest-cost producer of hydrogen in the world, which will really spur the development of hydrogen logistics for getting hydrogen out,” he said. “And to get to scale, it’s going to require some big investments.”

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IPP retains banker for California plant sale

An independent power producer has retained a banker for a sale of a decades-old gas plant in California. Aging gas plants have been in the sights of clean fuels developers looking to retrofit or use facilities for clean fuel production and combustion.

GenOn, an independent power producer, has hired Solomon Partners to sell a 54 MW gas plant in California, according to sources familiar with the matter.

The plant, Ellwood, is located in Goleta, in Santa Barbara County, and was shuttered and retired by GenOn as of 2019. It reached COD in 1973 and ran two Pratt & Whitney FT4C-1 gas turbine engines.

Ellwood previously interconnected via Southern California Edison, a utility that is pursuing multiple natural gas decarbonization projects, including a hydrogen-blending initiative with Bloom Energy.

A teaser for the sale of Ellwood, which was issued last week, notes there is an opportunity to install a battery energy storage system at the site, one of the sources added.

Elsewhere in California, investment firm Climate Adaptive Infrastructure and developer Meridian Clean Energy are seeking to demonstrate decarbonization in peaker plants at the much newer gas-fired Sentinel Energy Center. Their plans include hydrogen blending.

GenOn declined to comment. Solomon Partners did not respond to requests for comment.

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Exclusive: Liquid hydrogen at room temp: Tech firm raising money to scale

A provider of liquid organic hydrogen carrier technology is finishing a second seed round with designs on a Series A next year. The technology allows hydrogen to be transported as a liquid at room temperature.

Ayrton Energy, the Calgary-based provider of liquid organic hydrogen carrier storage technology, is preparing to launching a second seed round and plans a $30m Series A next year, CEO Natasha Kostenuk told ReSource.

Ayrton, with 10 employees, allows hydrogen to be transported as a liquid at room temperature, Kostenuk said. The liquid can also be transported in existing infrastructure while mitigating pipeline corrosion.

The company’s target customers are hydrogen producers, utilities and hub-and-spoke logistical servicers.

To date Ayrton has raised $5m from venture capital and a similar amount will come from the next seed round, Kostenuk said. A 30 kg per day pilot project with a gas utility in Canada is underway and Ayrton will look to 10x that next year, she said, with eyes on 3 metric tonnes per day commercialization.

“It scales like electrolyzers,” she said of the technology. “We can get very large, very easily.”

Ayrton is now engaging investors and potential advisors, Kostenuk said. “It would be good to engage with us now.”

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