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Mitsubishi Hydrogen Infrastructure appoints president and CEO

Michael Ducker has been appointed president and CEO of Mitsubishi Hydrogen Infrastructure.

Michael Ducker has been appointed president and CEO of Mitsubishi Hydrogen Infrastructure.

Ducker was previously senior vice president and head of hydrogen infrastructure at the firm, a post he held since 2022. He has also been chief operating officer of the ACES Delta hydrogen project in Utah since 2020, according to his LinkedIn profile. He joined Mitsubishi in 2012.

Mitsubishi Hydrogen Infrastructure is a wholly owned subsidiary of Mitsubishi Power Americas and a Group Company of Mitsubishi Heavy Industries (MHI), with the aim of providing high-quality solutions and projects to customers and partners as an established business in the clean hydrogen market while simultaneously enabling greater agility to keep pace with a rapidly evolving and dynamic hydrogen market.

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Suburban Propane Partners purchases RNG assets from Equilibrium

The acquisition provides opportunity for synergies between the acquired assets and Suburban’s existing investments in rDME, hydrogen and RNG.

Suburban Propane Partners will acquire a platform of two operational renewable natural gas assets from Equilibrium Capital Group for $190m, according to a press release.

The acquisition provides opportunity for synergies between the acquired assets and Suburban’s existing investments in rDME, hydrogen and RNG, the release states.

The transaction will be funded with borrowings of approximately $120m under Suburban’s revolving credit facility, and the assumption of approximately $80m of outstanding green bonds.

A large-scale RNG facility in Stanfield, Arizona is currently operating and includes seven anaerobic digesters, manure rights from approximately 55,000 dairy cattle and an interconnect with an interstate pipeline. An additional operating facility in Columbus, Ohio is currently receiving tipping fees from several large food and beverage providers for processing food waste into fertilizer and biogas, and has an active development project to upgrade the biogas into RNG for use in the transportation sector.

There are option rights for a third RNG facility in the Midwest currently being developed by Equilibrium.

In addition to the purchase of two operational biogas facilities, the parties have formed a partnership to serve as a long-term growth platform for the identification, development and operation of additional RNG projects; including an existing pipeline of identified RNG projects that are in various stages of development.

The development company will invest in and develop approximately $155m of future RNG projects, of which Suburban Renewables will own approximately 70% and Equilibrium will own approximately 30% once such projects are fully funded.

Wells Fargo Securities, LLC served as exclusive financial advisor to Suburban. Evercore served as the exclusive financial advisor to Equilibrium Capital Group.

It is expected to be accretive to Suburban’s distributable cash flow in fiscal 2024 as earnings benefit from ongoing expansion and production efficiency efforts

“We look forward to building upon and advancing this opportunity as we seek to leverage Equilibrium’s seasoned management team with a well-established network of operators, engineering and construction providers and off-takers, and a strong commitment to sustainable investments,” Michael Stivala, President and Chief Executive Officer of Suburban Propane, said in the release. “The scalable platform complements our existing portfolio of renewable energy assets, either as a stand-alone RNG distributor, or as a pathway to rDME and hydrogen production.”

In early 2022 Suburban made a 25% stake sale in Independence Hydrogen for $30m. Independence Hydrogen, of Ashburn, Virginia, was advised by Energy & Industrial Advisory Partners. Suburban was assisted by Proskauer Rose.

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Ontario Teachers’ Pension Plan acquires RNG firm Sevana Bioenergy

Ontario Teachers has acquired a majority stake in the RNG developer and made a capital commitment of $250m.

Ontario Teachers’ Pension Plan Board has entered into a strategic partnership with Sevana Bioenergy that will see it acquire a majority stake in the business and make a capital commitment of $250m to develop renewable natural gas (RNG) projects across North America, according to a press release.

Sevana is a pioneer in the RNG industry, developing and upgrading large-scale biogas projects to increase the production and use of RNG through the reduction of organic waste.  Sevana has successfully executed dairy and organics projects which include more than 20 state-of-the-art digester tanks across agricultural regions such as Oregon, Idaho and South Dakota since its founding by CEO John McKinney in 2017.

Sevana led these innovative projects to deploy more than $350m under construction and worked closely with farmers to form long-term beneficial partnerships as part of its strategy to own and operate reliable digester facilities. Sevana’s team of in-house experts has over 150 years of combined experience designing, operating, and maximizing performance of anaerobic digesters with projects worldwide.

“We are pleased to partner with John and the Sevana team to help accelerate their efforts to develop advanced digester facilities that produce RNG and electricity for transportation fuel, EV charging and other forms of energy,” said Zvi Orvitz, senior managing director, Sustainability & Energy Transition, Private Capital at Ontario Teachers’ Pension Plan. “Sevana has a demonstrated track record of success in the implementation of cutting edge RNG facilities, and we are excited by the opportunity to further scale the company as it enters its next chapter of growth.”

RNG is an important tool in the decarbonization of transportation, heating and industrial energy consumption and Sevana is a market leader entering new markets with RNG related products. Sevana’s projects capture fugitive methane emissions from farm animal and other organic waste streams that contribute to climate change and use this waste to produce low-carbon renewable power and RNG to replace fossil fuel-based energy sources. The company boasts a deep pipeline of future development opportunities and is also actively considering acquisition opportunities across the U.S.

“We welcome Ontario Teachers’ and look forward to our partnership as we work toward our objective of providing decarbonization solutions from RNG and continuing to enter new markets with related products” said Steve Compton, president at Sevana Bioenergy. “This commitment accelerates development of our industry leading projects that contribute direct economic and sustainable benefits to local communities and reduce greenhouse gases.”

Sevana is the latest investment by Ontario Teachers’ Pension Plan in the Sustainability and Energy Transition sector and will serve to advance the organization’s commitment to achieve net-zero greenhouse gas emissions by 2050.

Kirkland & Ellis LLP served as legal counsel to Ontario Teachers’ on the transaction. Fredrickson and Byron served as legal counsel to Sevana.

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Vertex Energy sells used motor oil refinery in pivot to energy transition

Vertex Energy sold an Ohio used motor oil refinery for $90m, and will invest further in renewable diesel and potential sustainable aviation fuel opportunities.

Vertex Energy, a specialty refiner and marketer of high-quality refined products, has sold its Heartland used motor oil collection and recycling business to a wholly owned subsidiary of GFL Environmental for total cash consideration of $90m.

Under the terms of the transaction, GFL acquired Vertex’s 20 million gallon per year Heartland used motor oil (UMO) refinery in Ohio and the associated Heartland UMO collections business, according to a news release.

After fees, total net cash proceeds from the transaction are approximately $85m. The company may use some of the transaction proceeds to reduce outstanding debt on its balance sheet.

Houlihan Lokey served as financial advisor to Vertex, and Stroock & Stroock & Lavan LLP served as legal counsel to Vertex for the transaction.

The transaction positions Vertex to redeploy capital into energy transition assets of scale. Vertex continues to examine potential investment opportunities across the sustainable fuels sector, including further development of its renewable diesel production business, as well as potential new opportunities in the rapidly growing Sustainable Aviation Fuel (SAF) market. Management believes the transition to the production of lower-carbon, sustainable fuels and products represents an attractive investment opportunity that positions the Company to achieve meaningful growth in Adjusted EBITDA and free cash flow long-term.

Vertex believes the resulting streamlined asset footprint will enable further operational focus and enhanced efficiencies throughout the company, according to the press release. The improved operational focus on the Mobile refining facility comes almost concurrently with anticipated mechanical completion and subsequent start-up of initial renewable diesel production which is currently expected to be completed in the second quarter 2023.

“We believe that the divestiture of our used motor oil business at Heartland, while a significant element of our company’s history and roots, will reflect another step forward in the greater transformation of our business into an energy transition story of scale. We expect that this transaction will serve us well by enabling the improvement of our balance sheet health, while adding strategic value through the streamlining of our operations. We remain highly focused on the execution of our conventional fuels refining strategy and the development of a large-scale, sustainable fuels production business longer-term. Make no mistake, we are committed to our remaining legacy business, coupled with our new investments in the Mobile refinery and the Gulf Coast, a key pathway to our greater energy transition strategy,” stated Benjamin P. Cowart, president and CEO of Vertex.

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EverWind in capital raise for Nova Scotia wind-to-hydrogen complex

EverWind Fuels is soliciting investor bids for a $1bn initial phase of its Point Tupper renewables and hydrogen/ammonia production facility in Atlantic Canada.

EverWind Fuels, the Canada-based renewable fuels developer, is preparing to launch a process to raise an estimated $800m in debt for its Point Tupper ammonia production and export facility near Halifax, according to two sources familiar with the matter.

Citi and CIBC are mandated on the raise.

The company is seeking capital from a variety of investors, one of the sources said. The raise will likely conclude around the middle of the year with Citi stepping up for part of the debt quantum.

EverWind is also in talks with Canadian Infrastructure Bank, one of the sources said.

EverWind, Citi, CIBC and CIB did not respond to requests for comment.

Nova Scotia’s Minister of Environment and Climate Change recently approved the Point Tupper Green Hydrogen/Ammonia Project – Phase 1. Construction should begin this year on phase 1 of the project, consisting of a 300 MW electrolysis plant along with a 600 tonnes-per-day ammonia production facility. The project also involves construction of a liquid ammonia pipeline to a jetty for international shipping and a 230 kW substation that will bring in electricity.

Government support for the project is leading to offtake agreements needed to build out a hydrogen supply chain at scale, a third source said. The project is nearing a $200m offtake agreement for green hydrogen with a large global manufacturer, this source added.

The German groups E.ON and Uniper said in August that they aim to buy up to 500,000 tonnes per year of ammonia each from EverWind, starting in 2025, when the project is set to begin production.

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US salt cavern developer selling hydrogen storage project

A US-based developer of salt cavern projects for hydrogen storage has retained a financial advisor to sell its first project and is informally seeking an equity investor.

Phoenix Hydrogen, a salt cavern storage developer based in Berkeley, California, has hired a financial advisor to run a sale of its primary project in Arizona, according to two sources familiar with the matter.

Scotiabank is leading the process, which will launch next week, the sources said. The sale is for 100% of the company’s first project near Kingman, Arizona. The project is expected to reach FID in the next 18 months.

Phoenix CEO Shawn Drost said in an interview that the company is informally seeking a platform equity investment as well but is only willing to take on a minority partner. An equity sale would need to raise an amount in the “low-tens” of millions, he said. It’s a difficult proposition, as equity providers in the space tend to demand majority positions.

The company wants to bankroll projects from beginning to end as an owner operator, he said, but requires capital to do so.

Phoenix, a six-person team, has a relationship with GHD Group for EPC, he said. The company is seeking relationships with production-side developers to sign site and storage leases.

Scotiabank did not respond to requests for comment.

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Denver green ammonia firm prepping series C capital raise

A green ammonia developer and technology provider is laying the groundwork for a series C capital raise later this year, and still deliberating on a site for its first project.

Starfire Energy, a Denver-based green ammonia producer, is wrapping up a series B capital raise and laying the groundwork for a series C later this year, CEO Joe Beach said in an interview.

The company completed a $6.5m series A in 2021 and finished a $24m series B last year. Investors include Samsung Ventures, AP Ventures, Çalık Enerji, Chevron Technology Ventures, Fund for Sustainability and Energy, IHI Corporation, Mitsubishi Heavy Industries, Osaka Gas USA, Pavilion Capital and the Rockies Venture Club.

Beach declined to state a target figure for the upcoming raise. The firm has not used a financial advisor to date.

Starfire is currently deliberating on locations for its first production facility to come online in 2026, Beach said. Colorado is a primary contender due to ammonia demand, while the Great Plains offer abundant wind energy.

The firm’s strategy is to use renewable energy and surplus nuclear power from utilities to create ammonia from hydrogen with no storage component, eliminating the problems associated with hydrogen storage and transportation.

Targeted offtake industries include agriculture, maritime shipping and peaking power fuel consumption.

“The demand is global,” Beach said, stating that he expects about 150 leads to convert to MOUs. “We get inbound interest every week.”

For future capital raising, Beach said the company could take on purely financial investors, as it already has a long list of strategic investors.

“The expectation is we will wind up with manufacturing plants around the world,” Beach said.

The “new petroleum”

Many hydrogen production projects have been announced worldwide in the last year.

Beach said he expects many of those to transition into ammonia production projects, as ammonia is much easier to export.

Now, Starfire is working on developing its ammonia cracking technology, which converts ammonia into an ammonia/hydrogen blend at the point of use for chemical processes. The final product form in that process is 70% ammonia, 22.5% hydrogen and 7.5% nitrogen – all free of emissions.

The company is using proceeds of its series B capital raise to develop its Rapid Ramp and Prometheus Fire systems. Rapid Ramp uses a modular system design for the production of green ammonia using air, water, and renewable energy as the sole inputs. Prometheus Fire is an advanced cracking system that converts ammonia into hydrogen, operating at lower temperatures than other crackers and creating cost-effective ammonia-hydrogen blends that can replace natural gas.

The advantage to using this technology is that it makes the export of a hydrogen product financially feasible, Beach said.

“You should see ammonia becoming the new petroleum,” he said of the global industry. Ammonia can be deployed internationally like oil and provide the dependability of coal.

Eventually Starfire will undergo a financial exit, Beach said. Likely that will mean an acquisition, but an IPO is also on the table.

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