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Hydrogen mobility solutions provider hires advisor for capital raise

A hydrogen mobility solutions provider with offices in Europe and the US is conducting a second round of equity fundraising and has hired an investment bank for the effort.

Quantron, the Germany and US-based hydrogen trucking manufacturer, has mandated a financial advisor with offices on both continents for a capital raise, according to two sources familiar with the matter.

Stifel is leading the process, seeking to raise up to EUR 200m, the sources said. The aim is to close the round by the end of the year with the milestone of a convertible note by summer.

ReSource first reported on the raise in November, noting that it implies a valuation of up to EUR 1bn.

Quantron in September closed on a EUR 50m Series A with NASDAQ-listed Ballard Power Systems and German machinery manufacturer Neuman & Esser as investors.

Looking forward to the company wants to work with a US strategic or private equity interest committed to hydrogen, the sources said.

Officials at Quantron and Stifel did not respond to requests for comment,

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Amogy signs first pre-order with Norwegian shipowner

The customer will use Amogy’s ammonia-to-power system on a newbuild vessel for zero emissions sailing in 2025.

Amogy Inc., a pioneer of emission-free, energy-dense ammonia power solutions, and an undisclosed renowned Norwegian shipping company, have entered into a pre-order contract to supply four of Amogy’s 200 kW ammonia-to-power systems, according to a news release.

The newbuild vessel will be outfitted with a total of 800 kW of Amogy powerpacks. The Amogy integrated system will provide the primary power for the vessel with zero-emissions operations. Amogy’s highly efficient ammonia-to-power technology feeds liquid ammonia through its cracking modules integrated into a hybrid fuel cell system, which powers the electric motors.

The Hydrogen Source reported earlier this year that Amogy is set to launch a Series C capital raise of between $400m and $500m later next year.

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Johnson Matthey and thyssenkrupp Uhde partner on blue ammonia tech

The partners will combine their respective hydrogen and ammonia expertise in the technology arrangement.

Johnson Matthey (JM), a provider of sustainable technologies, and thyssenkrupp Uhde, a provider for engineering, construction, and service of chemical plants, have signed a Memorandum of Understanding to jointly offer a fully integrated low carbon (blue) ammonia solution, according to a news release.

In the drive to reduce CO2 emissions, the role of ammonia has expanded from a vital ingredient used to produce fertilizer for the agricultural sector, to a decarbonized carrier and supplier of hydrogen energy that’s easier to store and transport than pure hydrogen. The movement of low carbon ammonia can utilize existing infrastructure making it a leading energy transition solution that’s ready to capture, store, and ship vast quantities of hydrogen for use in the power and shipping sector, and industrial value chains globally.

By joining forces thyssenkrupp Uhde and JM can access the blue ammonia market together offering proven technologies combining the uhde® ammonia process and JM’s hydrogen expertise through its LCHTM technology, which will enable the production of blue ammonia with up to 99% CO2 capture.

thyssenkrupp Uhde has licensed, engineered, or constructed over 130 ammonia plants worldwide since 1928 and is market leading in plants greater than 3,000 metric tonnes per day with its unique uhde® dual pressure technology. JM’s LCH technology, which utilises JM’s autothermal reformer alone, or in conjunction with JM’s gas heated reformer, has been selected for several of the world’s first large scale blue hydrogen projects including bp’s H2Teesside, a 700-megawatt low carbon hydrogen production plant, and the H2H Saltend project with Equinor and Linde for a 600-megawatt low carbon hydrogen production plant.

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Honeywell advancing LOHC strategy

Honeywell is in discussions with multiple potential customers to provide its liquid organic hydrogen carrier (LOHC) solution, with plans to use existing refining infrastructure to reduce costs.

Honeywell is in talks with multiple customers to provide its LOHC technology for the expected growth in international hydrogen transport opportunities.

The LOHC product, which chemically combines hydrogen gas through toluene hydrogenation into methylcyclohexane (MCH), is expected to compete with ammonia and other modes of transport in global hydrogen supply chains. 

Honeywell will rely on its existing refining infrastructure – including through retrofits – to convert and transport hydrogen at a low cost, according to Bryan Glover, chief technology and growth officer for Honeywell Sustainable Technology Solutions.

“Honeywell’s LOHC solution is designed to use existing refinery infrastructure to convert and transport hydrogen,” he said via email. “Additionally, the potential to retrofit existing fixed bed and continuous catalyst regeneration platforming units dramatically reduces the overall investment cost for hydrogen transportation when compared to greenfield installations.”

Honeywell was recently selected by Japanese oil company ENEOS to provide the technology to what it calls the world’s first commercial-scale LOHC project. Hydrogen from the ENEOS project will be exported to Japan in the form of MCH, with the hydrogen recovered through dehydrogenation and the toluene, an organic solvent, sent back for additional cycles.

ENEOS in January announced that it made an equity investment in MCVE Gulf Coast, LLC, a U.S. Gulf Coast clean hydrogen project that seeks to produce hydrogen and ammonia. As part of the project, ENEOS is evaluating the feasibility of exporting hydrogen to Japan via MCH.

Some experts have questioned the long-term viability of MCH as a hydrogen carrier, citing the need for energy and storage infrastructure at export and import sites, in addition to the return shipping requirements and the fact that only about 6% of MCH by weight consists of hydrogen.

Honeywell already has over 1,000 dehydrogenation installations in service, and can utilize existing refining infrastructure to keep costs low, according to Glover.

“The key advantages of using MCH as a hydrogen carrier are cost and energy consumption alongside safety, permitting and infrastructure availability,” he said. “For exports, it provides an efficient hydrogen solution with minimal losses, and catalysts can be recycled for reuse.”

Glover said the LOHC solution will be used at multiple ENEOS sites located around the world, all with a focus on importing hydrogen into Japan. 

“Honeywell’s LOHC solution will be used at multiple ENEOS sites,” Glover said. “The units are not installed yet, however these will be located around the world with a focus on importing hydrogen into Japan,” he said, noting they will be built either in existing plant locations or at newly designated locations.

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Green hydrogen developer in exclusivity with new investor

New York-based green hydrogen developer Ambient Fuels is in exclusivity with a new investor, with proceeds from the capital raise slated to fund project development and acquisitions.

Ambient Fuels, the New York-based green hydrogen developer, is in exclusivity with a new investor for a bilateral capital raise, CEO Jacob Susman said in an interview.

Susman declined to name the private equity provider but said the backing will allow Ambient to develop several projects, as well as acquire projects from other developers. The deal is proceeding without the help of a financial advisor.

Once the company reaches its run rate, Ambient plans to complete three to four projects per year costing $50m and up, Susman said, with the first expected to reach operation in 2025.

The company’s initial geographic focus is on the Gulf Coast, centered on the Port of Corpus Christi, Susman said. New York, California, the Pacific Northwest and traditional wind energy states in the Midwest and West are areas of additional work.

Hydrogen hubs

Ambient is closely following the DOE hydrogen hub applications process, Susman said. Which regions are awarded funding could make a difference for where the company locates new projects.

According to ReSource‘s project tracker, Ambient is involved in at least two of the hubs that were encouraged by the DOE to submit a final application: California’s Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES), and the Port of Corpus Christi Green Hydrogen Hub.

In 2021 Ambient completed a funding round led by SJF Ventures. Several other VC funds and angel investors also participated.

Open for offtake business  

Ambient is looking for offtakers in industries that use the molecules for feedstock and energy but need to meet decarbonization targets.

The company is working to provide hydrogen as an industrial feedstock and energy source to sectors including transportation, oil and gas, mining, glass and steel production and automobile manufacturing. Supplying hydrogen for ammonia fertilizer is another target market.

Advisors with clients in those industries should reach out to Ambient, Susman said.

M&A strategy

Ambient strives to be a fully integrated devco with the resources, capital and expertise to take a project to fruition, Susman said. Projects developed by smaller companies can look to Ambient as a buyer for their projects.

“We want to be a home for those great projects that are being developed independently,” Susman said. “Absolutely we will be acquiring projects.”

Smaller developers with good projects could also be targets for takeover with the backing from the new investor, Susman said. The firm could also make a technology buy in software for project development, operations, or possibly the equipment side, though Susman said there’s a low probability of that.

Financial advisors that have leads on good projects Ambient can acquire are welcome to pitch, Susman said.

Susman said he is not in a hurry to exit Ambient and can see the company being independently financed for years to come.

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Hydrogen developer raising equity for US and EU projects

A Washington, DC-based hydrogen developer has hired an advisor to raise equity for three projects in California, and is laying the groundwork for a second capital raise in the EU.

SGH2 Energy, a Washington D.C.-based hydrogen developer, is in the early stages of a process to raise project equity for its three California projects.

Morgan Stanley has been retained to run the process, which could result in taking on two investors, CEO Robert Do said in an interview. The company hopes to have the process wrapped up within three months, he added.

Do declined to disclose the amount he is seeking to raise, but said the company prefers a strategic investor that can co-develop projects outside of California.

Meanwhile, SGH2 has filled out 70% of the senior debt commitments it will need for its Lancaster, California plant, Do said. At the Lancaster plant, SGH2 plans to produce up to 12,000 kilograms (1,380 MMBtu) of clean hydrogen per day, and 4.5 million kilograms per year (517,000 MMBtu) from the conversion of 42,000 tons per year of rejected recycled mixed-paper waste.

An additional set of three projects in Germany, Belgium and Holland will need an equity provider as well, Do said. That process could launch at the end of this year and the company could hire additional financial advisors.

A less expensive proposition

In addition to the Lancaster plant, SGH2 is advancing a Bay Area agricultural waste-to-hydrogen project in Stockton and a Sierra Valley forest residue-to-hydrogen plant.

Lancaster has offtake agreements for 10 years, and the company is in talks with the same offtaker for the other projects.

SGH2’s process requires about five acres of land for a project, as opposed to about 300 acres for solar-powered electrolysis, Do said. The process also requires less water.

“It gives us a cost-competitiveness where we can be two-to-three times cheaper,” Do said.

SGH2 is exporting that process to Europe, Do said. The EU is still going through iterations of new legislation, particularly the Renewable Energy Directive III, that could clarify SGH2’s place in that market.

“Until the legislation is clear it’s hard to really launch the project and know what kind of support you’re getting,” Do said. SGH2 has sites, feedstock and development partners in place for Europe.

SGH2 was spun off from a technology development company that raised about $50m from various VC firms and energy companies, Do said. He is the controlling owner of SGH2.

Do plans to expand across the globe and will be raising money to fund projects in Korea, South Africa and elsewhere.

“There will be indeed opportunities for us to work with additional bankers and funders,” he said.

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Former Denbury executive targeting growth through CCS at industrial emitters

Tracy Evans, a former COO of Denbury Resources, has launched a business unit aimed at offering carbon capture and sequestration services for existing industrial emitters.

CapturePoint, a Texas-based carbon capture and enhanced oil recovery specialist, is seeking to grow by offering carbon capture services to existing industrial emitters.

The company, started with an initial focus on enhanced oil recovery operations using CO2, has launched a subsidiary called CapturePoint Solutions to capitalize on growing demand for carbon capture services at industrial plants, CEO Tracy Evans said in an interview.

Evans, a former chief operating officer of Denbury Resources, has years of experience operating CO2 capture units, pipelines, and oil wells. “The only difference between EOR utilization and sequestration is going to the saline aquifers,” he said of the pivot.

The company’s primary focus is on existing emissions, Evans said, emphasizing the immediate opportunity over proposed plants that might take many years to build. He added that the company would target “pure” sources of CO2 versus diluted sources.

Evans brought in a JV equity partner for the CCS business, but declined to name them. He said the company is sufficiently capitalized for now but might need to raise additional equity as it signs up new projects in the next 12 to 16 months.

Tax equity and CCS

CapturePoint recently completed a tax equity deal for a CCS facility that has been operational since 2013, thanks to changes to provisions governing the use of 45Q for carbon capture that allowed existing plants to qualify if they capture over 500,000 tons of CO2.

The deal, at CVR Partners’ Coffeyville fertilizer plant, opened up an initial payment of $18m and includes installment payments, payable quarterly until March 31, 2030, totaling up to approximately $22m.

An ethanol facility where CapturePoint operates will also qualify for 45Q benefits because 80% or more of the carbon capture unit is being rebuilt, Evans said. The company was able to finance the new construction at the ethanol facility from cash flow out of its oil & gas operations.

Going forward, new projects installed at existing emitters will follow a project finance model, with equity, debt, and 45Q investors, Evans said. The company will use a financial advisor when the time is right, the executive noted, but said there’s more work to be done on sizing and costs before an advisor is lined up.

“The capture costs are similar for each site,” he said. “The pipeline distances to a sequestration site is what drives significant variation in total capital costs.”

Evans believes that tax credit increases in the Inflation Reduction Act – from $35 per ton to $60 per ton for CO2 used in EOR, and $50 per ton to $85 for CO2 sequestration – should help the CCS market evolve and lead to additional deals.

“There wasn’t much in it for the emitter at $35 and $50, to be honest,” he said, “whereas at $60 and $85 there’s something in it for the emitter.”

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