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Linde seeking double-digit return on Texas blue hydrogen plant

Linde CEO Sanjiv Lamba expects the $1.8bn project to achieve a double-digit return, and expressed confidence that the facility will be completed on time in 2025.

Linde plc will spend roughly $5bn on capex and acquisitions in 2023, CEO Sanjiv Lamba said on the company’s 4Q22 earnings call.

That includes a long-term agreement to supply clean hydrogen and other industrial gases to OCI’s new blue ammonia plant in Beaumont, Texas. Linde will build, own and operate an on-site complex by 2025 which will include autothermal reforming with carbon capture, plus a large air separation plant

The company estimates a return profile in the double digits for the project, Lamba said.

“This is a traditional industrial gas project no different to any other that we do and that’s how we would then factor the return coming back into the returns you would see hitting the EPS,” Lamba said.

Lamda also expressed confidence in the company’s ability to complete the project on time in 2025 in spite of its complexities. He noted Linde has already been working on the project for a while, and is in discussions with major carbon capture players, some of which already hold or are in the process of obtaining a federal Class VI permit for carbon dioxide sequestration.

The OCI project will connect to Linde’s existing pipeline in the region, Lamba said.  “We have demand for that blue hydrogen and yes, there is a premium,” Lamba said of the company’s existing grey hydrogen customers.

The partnership with OCI helped add to the company’s project backlog, defined as contractual growth projects with secured returns, which now stands at $9.2bn, Lamba said. Last year was also a record year for small on-site wins, with 52 new secured contracts providing revenue for the next decade.

Lamba said the industrial gasses giant has “no interest to own or speculate” in the global chemicals market and will instead seek offtakers like OCI for its products. OCI is an expert in ammonia production, logistics and marketing, things Linde does not want to engage in.

Meanwhile, Linde has started the process of selling $2bn in gas projects, including Linde’s $1.4bn project with Exxon Mobile in Singapore, Lamba said.

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Tata Steel to invest 65m euros in Dutch green steel production

Tata Steel Nederland has signed contracts with McDermott, Danieli and Hatch to advance technical preparations for green steel production.

Tata Steel Nederland has signed contracts with three companies – McDermott, Danieli and Hatch – to advance technical preparations for green steel production.

This phase in the project is expected to cost over 65m euros, and will result in an engineering package that forms the basis for final permitting and project planning, according to a press release.

Tata Steel wants to move to green steel manufacturing in a clean environment as fast as possible, with each of the three partner companies bringing their own specific expertise to help Tata shape and deliver hydrogen-based steel manufacturing.

The project is led by the Tata Steel internal project and sustainability team, in close support of the main delivery partners. McDermott is responsible for the construction input and support of the technical project management. Danieli is responsible for the engineering design for the  plant and technology that delivers the Direct Reduced Iron (DRI), the first step in the iron making process. Hatch is the technology licensor  of the electric furnaces (REF) that melt the DRI and help to reduce the oxygen content further thereby improving the final steel quality. The REF and DRI plant are closely coupled to form an integrated production system.

“We recently signed agreements about our future with two ministries and the province of North Holland. In doing so, we have committed to being CO2 neutral before 2045 and emit between 35 to 40% less CO2 before 2030. This will primarily be achieved via the hydrogen route where the blast furnaces are replaced with modern clean steel making technology that uses hydrogen or gas instead of coal,” said Hans van den Berg, CEO of Tata Steel Nederland in a statement.

DRI (direct reduced iron) technology is a relatively new production technology, in which iron ores are directly reduced using natural gas or hydrogen, rather than coal. The reduction of iron ores takes place in a DRI plant in a shaft reactor  at a relatively low temperature of up to about 1000°C. The reduced iron is then further processed into hot metal in an electric furnace (REF). During this step the right amount of carbon is being added to create a very precise and high quality feedstock for our steel plant.

The DRI-REF technology offers several advantages. By using green electricity and a predominant hydrogen stream, the CO2 emissions from the process are much lower than when using blast furnaces. The new process can also accommodate higher percentages of circular steel, where scrap can be added to the REFs or the induction furnaces.

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TES moves into North America with appointment of Americas CEO

The Belgium-based company has appointed industry veteran Cynthia Walker to lead a new office in Houston.

TES has appointed Cynthia Walker as CEO of TES Americas and as Chief Strategy Officer of TES Group.

She will head the newly established office in Houston, Texas, according to a news release.

In these new roles, Cynthia will be responsible for building TES’ business in the Americas with an initial emphasis in the US and Canada and for supporting the development of the TES strategic plan and resource allocation. Cynthia joins a fast-growing, dynamic team at TES which is rapidly expanding as the company works towards achieving its objective to deliver affordable, green energy as a cost-effective alternative to fossil fuels via its unique and pioneering business model, which combines hydrogen with recycled CO2 to create an efficient, circular, closed net-zero energy loop.

Commenting on the announcement, Marco Alverà, CEO of TES Group, said: “I am delighted to welcome Cynthia to our rapidly expanding and multinational team.  Cynthia is one of the most well-established energy executives and she holds significant expertise in execution, finance, and development. Her in-depth knowledge of the energy sector and broad skill set will fit in perfectly with TES’s game-changing mission to create a net-zero future. Having her on board will further enable us to bolster our growth strategy and our operations particularly in the North American market.”

Cynthia comes with twenty-four years of extensive leadership experience across multiple functional and operational areas within the energy industry, including P&L responsibility, operations, corporate and business development, commercial marketing, strategic planning and financial functions. Before joining TES, Cynthia was most recently Senior Vice President, Midstream & Marketing for Occidental Petroleum Corporation and previously Senior Vice President, Strategy & Corporate Development and Chief Financial Officer. Prior to joining Occidental in 2012, she was a Managing Director within the Investment Banking Division at Goldman Sachs & Co.  She is an independent director of Sempra and Chord Energy.

Cynthia Walker, CEO of TES Americas and Chief Strategy Officer of TES Group, said: “I am thrilled to join the team at TES during this critical time in the industry as participants balance the priorities of providing clean, affordable and reliable energy.  The innovative approach at TES has the potential to unlock all of these priorities today with  North America positioned to play a key role. I look forward to working with my fellow TES teammates to advance our shared ambition to make a positive impact and to create value.”

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Gentari appoints head of US hydrogen development

Gentari, the energy transition arm of Malaysian oil and gas company Petronas, has appointed a US head of hydrogen development.

Gentari, the energy transition arm of Malaysian oil and gas company Petronas, has appointed a US head of hydrogen development.

Justin Rencurel, a Houston-based energy industry veteran was appointed to the role, according to a LinkedIn post.

“Gentari is in the midst of building a competitive presence throughout the value chain for clean hydrogen and hydrogen derivatives products,” according to Rencurel’s profile.

Prior to joining Gentari, Rencurel was with Blue Pony Energy, providing project and commercial advisory services to start-ups. He also spent 10 years with Spectra Energy, a midstream natural gas firm.

Rencurel did not respond to requests for comment.

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Exclusive: Wisconsin RNG portfolio for sale with large renewables portfolio

A major Canadian utility is auctioning off four Wisconsin RNG assets as part of a larger renewables selldown. The subsidiary at auction has previously indicated that it would take part in Northeastern US hydrogen development.

Algonquin Power & Utilities is selling a package of four renewable natural gas assets, totaling 532 mmbtu, in Wisconsin as part of a larger renewables auction, according to two sources familiar with the matter.

JP Morgan is advising on the process, codenamed Project Power, the sources said.

The process comprises mostly operational onshore wind (2,325 MW) and solar (670 MW), along with an 8 GW development pipeline across 10 power markets, according to a teaser seen by ReSource. The renewable assets are collectively known as Liberty under the Algonquin banner.

The pipeline includes 1,600 mmbtu of RNG. The operational RNG assets reached COD in 2022.

Algonquin did not respond to requests for comment. JP Morgan declined comment.

The Wisconsin assets are apparently the former Sandhill Advanced Biofuels projects, which were acquired by Algonquin in 2022.

When that acquisition was made, it was announced that Liberty had signed on as a “hydrogen ecosystem partner” in the multi-state Northeast Regional Clean Hydrogen Hub. That hub ultimately was not selected by the US department of Energy for hub funding.

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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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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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