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Montana Renewables hires advisor for $250m bond issuance

Montana Renewables, a subsidiary of Calumet Specialty Products, has appointed Citigroup to serve as lead underwriter in the proposed offering of $250m of tax-exempt bonds to be issued by Cascade County, Montana.

Montana Renewables, a subsidiary of Calumet Specialty Products, has appointed Citigroup to serve as lead underwriter in the proposed offering of $250m of tax-exempt bonds to be issued by Cascade County, Montana, according to a news release.

Montana Renewables produces SAF, green hydrogen, renewable diesel and renewable naphtha from solid waste and other feedstocks. The bonds are expected to be issued in the first quarter of 2023.

“We thank Cascade County and the State of Montana for making their $250 million municipal bond capacity available,” said Bruce Fleming, EVP Montana Renewables and Corporate Development, said in the release. “We look forward to completing this bond issuance and expect it to be an upgrade to MRL’s cost of capital.”

Great Falls is the county seat of Cascade County, where Calumet recently completed an expansion of its oil refinery to produce SAF. In December Montana Renewables acquired the second reactor needed to expand the scope of its SAF production, according to a company update.

Late last year it was reported that Calumet was working with Lazard as it evaluates investment inquiries from strategics interested in the SAF business.

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Canadian electrolyzer manufacturer appoints new CFO

Ontario-based Next Hydrogen has appointed Rohan Advani as its new CFO.

Next Hydrogen Solutions Inc., a designer and manufacturer of electrolyzers has appointed Rohan Advani as chief financial officer, effective December 12, 2022, according to a news release.

Rohan will be replacing Kasia Malz who is leaving the company to pursue other interests. To ensure continuity, Malz will remain with the Company until January 2, 2023, and will continue in an advisory role thereafter to ensure a seamless transition.

Advani comes to Next Hydrogen with financial and leadership experience in the manufacturing industry, previously serving at Magna International and Ecolab along with Canadian Tire and KPMG.

Rohan was most recently the finance department leader at Magna International, where he led the financial operations for a CAD $500m division.

“I am extremely thrilled to have Advani join the team and focus on our next phase of growth. Rohan’s breadth of financial experience in the manufacturing industry will be an invaluable addition to the team as we look to establish ourselves as a leading water electrolyzer equipment manufacturer,” said Raveel Afzaal, CEO and president of Next Hydrogen.

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Buckeye Partners acquires EnCap-backed CCS developer

EnCap made a $350m initial capital commitment to Elysian in 2021.

Buckeye Partners has acquired Elysian Carbon Management from EnCap Flatrock Midstream.

Elysian provides integrated end-to-end carbon capture and storage (CCS) solutions to industrial, power and similar facilities seeking to transition to lower carbon products to advance emissions reductions goals.

EnCap made a $350m initial capital commitment to Elysian in 2021.

“This acquisition reflects Buckeye’s commitment to continue to provide essential infrastructure and logistics solutions to meet our customers’ evolving needs in the energy transition,” said Buckeye CEO Todd Russo. “Rapidly developing CCS-related technologies and solutions offer abundant synergies across Buckeye’s project development capabilities and existing pipeline network and are essential to enabling the energy transition’s success. We’re excited for the Elysian team to join the Buckeye platform and to integrate their expertise to better serve our customers’ growing lower-carbon needs.”

This acquisition is another meaningful step in Buckeye’s ongoing commitment to building a business that is responsive to the needs of the future while continuing to serve the energy needs of communities today. Through advancing strategies to further reduce carbon emissions, Buckeye is committed to becoming a net zero energy business by 2040, across scope 1 and 2 GHG emissions. These commitments and others can be found in Buckeye’s newly released 2022 Sustainability Report.

“Buckeye continues to demonstrate resiliency and emissions-reduction results across its increasingly diversified energy solutions portfolio,” said Elysian CEO Bret Logue. “We’re fully aligned with their decarbonization mission and look forward to adding immediate value to Buckeye’s customer base and their momentum in the energy transition by integrating CCS technologies across the energy value chain.”

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Cryo storage tech startup completes strategic fundraise

The new funding will enable Verne to accelerate development of their cryo-compressed hydrogen technology for on-board hydrogen storage for heavy-duty vehicles.

Verne, a developer of high-density hydrogen storage systems, has completed a strategic fundraise led by Trucks Venture Capital, with participation from existing investors Collaborative Fund and Amazon’s Climate Pledge Fund, and new investors United Airlines Ventures Sustainable Flight Fund and Newlab.

The new funding will enable Verne to accelerate development of their cryo-compressed hydrogen (CcH2) technology for on-board hydrogen storage for heavy-duty vehicles. The investment brings Verne’s total funding to $15.5m including grant funding, according to a news release.

Heavy-duty transportation is responsible for 12% of U.S. greenhouse gas emissions. Regulations such as California’s Advanced Clean Fleets and corporate “net zero” commitments necessitate a transition to zero-emission vehicles. However, large energy requirements and the importance of total cost of ownership make it difficult for fleets to transition from diesel to zero-emission technologies that currently involve costly performance tradeoffs. Existing Class 8 Battery Electric trucks provide limited range (~200 miles vs. 1,000 miles for a diesel truck), weigh 5,000–10,000 pounds more than a diesel truck (reducing payload available to haul cargo by 5-15%), and take over two hours to refuel. Hydrogen is the best solution to decarbonize vehicles that need to travel long distances or carry a heavy payload as it provides range, weight, and refueling advantages over battery electric trucks, but current hydrogen trucks still fall short of diesel-truck performance.

Since its founding in 2020, Verne has been dedicated to solving this challenge by developing high-density hydrogen storage that allows these vehicles to reach diesel-equivalent range and payload. Verne’s cryo-compressed hydrogen technology involves cooling and compressing hydrogen to achieve the maximum hydrogen density at 73 g/L internal density, a 33% improvement over liquid hydrogen and an 87% improvement over traditional 700 bar compressed gas hydrogen. The increased density leads to greater range and payload: Verne’s technology enables semi-trucks to achieve diesel-equivalent range, or over 900 miles, without adding any weight to the system.

“Verne’s technology will have a direct positive impact on commercial vehicles on road and in the air. High-density hydrogen is a powerful solution for large vehicles and aligns with our mission of backing the most aggressive climate-positive ideas for transportation,” said Jeffrey Schox, general partner at Trucks Venture Capital.

“Amazon views cryo-compression as a promising hydrogen storage solution,” said Nick Ellis, a principal at Amazon’s Climate Pledge Fund. “We believe cryo-compression can provide economic and operational advantages that will play an important role in the transition to zero-emission fleets.”

“Heavy-duty vehicles like semi-trucks and cargo handling equipment are vital to the functioning of our economy, but they are also some of the worst polluters. Verne is motivated to provide zero-emission solutions that don’t require these critical industries to make costly performance trade-offs,” said Ted McKlveen, co-founder & CEO of Verne. “Bringing on new strategic investors, and strengthening our partnership with existing investors, will help us accelerate our path to market and decarbonize this critical industry.”

Last year, Verne announced a CcHstorage record during stationary demonstration of a 29 kg storage tank at Lawrence Livermore National Laboratory. Verne also completed the first testing of their CcH2 storage system on-board a vehicle as part of their participation in the Breakthrough Energy Fellows program. This on-vehicle testing validated the performance of all sub-systems – including direct integration with the vehicles’ fuel cell – and confirmed the improved hydrogen density relative to the standard 700 bar compressed gas hydrogen storage method. These technical results prepare Verne to meet the significant commercial interest they are receiving from key trucking fleets and OEMs, as well as leading partners across aviation, ports, mining and hydrogen distribution & refueling.

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Exclusive: Pattern Energy developing $9bn Texas green ammonia project

One of the largest operators of renewable energy in the Americas, San Francisco-based Pattern is advancing a 1-million-ton-per-year green ammonia project in Texas.

Pattern Energy knows a thing or two about large renewable energy projects.

It built Western Spirit Wind, a 1,050 MW project in New Mexico representing the largest wind power resource ever constructed in a single phase in the Americas. And it has broken ground on SunZia, a 3.5 GW wind project in the same state – the largest of its kind in the Western Hemisphere.

Now it is pursuing a 1-million-ton-per-year green ammonia project in Corpus Christi, Texas, at an expected cost of $9bn, according to Erika Taugher, a director at Pattern.

The facility is projected to come online in 2028, and is just one of four green hydrogen projects the company is developing. The Argentia Renewables project in Newfoundland and Labrador, Canada is marching toward the start of construction next year, and Pattern is also pursuing two earlier-stage projects in Texas, Taugher said in an interview.

The Corpus Christi project consists of a new renewables project, electrolyzers, storage, and a pipeline, because the electrolyzer site is away from the seaport. It also includes a marine fuels terminal and an ammonia synthesis plant.

Pattern has renewable assets in West and South Texas and is acquiring additional land to build new renewables that would allow for tax incentives that require additionality, Taugher said.

Financing for the project is still coming together, with JV partners and prospective offtakers likely to take project equity stakes along with potential outside equity investors. No bank has been mandated yet for the financing.

Argentia

At the Argentia project, Pattern is building 300 MW of wind power to produce 90 tons per day of green hydrogen, which will be used to make approximately 400 tons per day of green ammonia. The ammonia will be shipped to counterparties in Europe, offtake contracts for which are still under negotiation.

“The Canadian project is particularly exciting because we’re not waiting on policy to determine how it’s being built,” Taugher said. “The wind is directly powering our electrolyzers there, and any additional grid power that we need from the utility is coming from a clean grid, comprised of hydropower.“

“We don’t need to wait for rules on time-matching and additionality,” she added, but noted the renewables will likely benefit from Canada’s investment tax credits, which would mean the resulting ammonia may not qualify under Europe’s rules for renewable fuels of non-biological origin (RFNBO) as recently enacted.

Many of the potential offtakers are similarly considering taking equity stakes in the Argentia project, Taugher added.

Domestic offtake

Pattern is also pursuing two early-stage projects in Texas that would seek to provide green hydrogen to the domestic offtake market.

In the Texas Panhandle, Pattern is looking to repower existing wind assets and add more wind and solar capacity that would power green hydrogen production.

In the Permian Basin, the company has optioned land and is conducting environmental and water feasibility studies to prove out the case for green hydrogen. Pattern is considering local offtake and is also in discussions to tie into a pipeline that would transport the hydrogen to the Gulf Coast.

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Low-carbon tech company targeting hydrogen at 35 cents per kilogram

A North Carolina net-zero solutions company has plans to raise capital and is scouting for a location in the US Gulf Coast for its first clean hydrogen production facility.

8 Rivers Capital, the North Carolina net zero solutions company and technology commercialization platform, will need to raise capital and is scouting for a location in the US Gulf Coast for its first clean hydrogen production facility, Chief Technology Officer and Co-founder Bill Brown said on the sidelines of CERAWeek in Houston.

Brown declined to elaborate on the capital raise, but said he is well connected to finance from previous roles he held at Goldman Sachs and Morgan Stanley. The company received a $100m investment from South Korea-based SK Group last March.

8 Rivers has technology for power generation, hydrogen production, gas processing, and direct air capture. Through its involvement with affiliate Net Power, 8 Rivers has developed the Allam-Fetvedt Cycle, a power cycle that uses the oxy-combustion of carbon-based fuels and a high-pressure CO2 fluid in a highly recuperated cycle that captures emissions. Net Power was recently acquired in a SPAC deal with Rice Acquisition Corp. II, which valued the company at $1.459bn.

In hydrogen, 8 Rivers has developed 8RH2, a process to make hydrogen from natural gas that produces lower emissions and higher efficiencies, according to its website.

8 Rivers announced in November that it signed an MoU with Japan-based JX Nippon to evaluate the US Gulf Coast for “commercial-scale deployment of 8 Rivers technologies across ammonia and other net-zero projects, including potential projects using CO2-rich natural gas.”

Hydrogen at 35 cents?

Brown isn’t too concerned with the source, or color, of hydrogen. He’s much more concerned with the price per kilo, and says his goal is to make low or zero-carbon-intensity hydrogen without concern for its provenance.

“If we can get hydrogen at 35 cents, you would never build a new power plant, because you’ve got hydrogen cheap enough to use a traditional hydrogen turbine,” Brown said. “I can make the cheapest hydrogen from methane, or coal for that matter. I can’t make it from electricity without subsidy.”

Hydrogen at 35 cents is USD 3 per MMBtu, making it competitive with gas.

“One-dollar hydrogen, to me, is worthless,” he said. “Let’s face it, right now, we have one-dollar hydrogen in the world, not clean, but we have seen the full demand already.”

“8 Rivers does not want to be the company that says ‘here, take my technology,’” Brown said. “8 Rivers wants to be the company that says ‘come to us and we will give you the cheapest hydrogen and we’re agnostic as to where it came from, but we can tell you it’s green.’”

Target markets include customers that are blending hydrogen, Brown said. With USD 50bn of hydrogen assets already deployed in the US, he’s not concerned about offtake.

“It’s the system,” Brown said. “The system is the offtake.”

For ammonia, island nations in transition, commercial shipping and coal replacement all present large potential markets, Brown said. If ammonia can be produced at USD 100 per ton, it will be more competitive than coal as an export fuel.

But Brown is adamant that hydrogen blending in existing infrastructure presents the best and most immediate use for hydrogen.

“All it takes is offtake,” Brown said. “The easiest thing to do with hydrogen is not converting it to ammonia to ship it overseas with some supply contract, the easiest thing to do is put it in a pipeline.”

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Reaching bankability: The developing financial landscape around green hydrogen

Panelists at the S&P Platts Global Power Markets conference discussed existing and future opportunities to finance hydrogen production, storage and transport.

Decarbonizing is no longer an option: almost every company in every industry understands that’s the direction in which they need to be moving – now.

And for some companies, hydrogen is the only solution, Fanny Charrier, hydrogen Americas coordinator at Crédit Agricole CIB, said during the Fueling Tomorrow with Hydrogen panel at the S&P Platts Global Power Markets conference this week.

Even so, the project menu is limited.

“We haven’t seen many projects to finance,” Charrier said. “Everybody’s waiting.”

ACES Delta in Utah is thus far the only producing green hydrogen project in the US to raise financing, Charrier said. Credit Agricole is thus focused on M&A debt and equity advisory.

“What we’re looking at is mostly pure green hydrogen projects,” she said. Green ammonia shipping to Europe is a main end-use and market. Project sizes range from a few million up to USD 5bn. “We’re also supporting some electrolyzer manufacturing plants.”

Mobility, heavy trucks and shippers looking for hydrogen is a potentially huge market, but hasn’t materialized yet, she said.

Demand signals

In Europe, commitments to close traditional power generation assets hold promise for clean fuels, António Fayad, manager of hydrogen strategy at EDP Renewables, said during the panel. In the US, EDP is mainly looking to industry to buy hydrogen at or adjacent to factories and other relevant facilities.

There has been a strong, customer-led demand signal from the US, said Sam Bartholomaeus, vice president of power and renewables at Woodside Energy. Woodside was already considering a hydrogen project in Oklahoma when the IRA was passed.

“The signal was already there in terms of seeing demand sectors that need to be decarbonized and seeing that we had a competitive proposition,” he said of the hydrogen portfolio Woodside is developing in the US.

Woodside recently signed a contract for Air Liquide to provide liquefaction equipment for a hydrogen project in Ardmore, Oklahoma. First production at that project will begin in 2026 and Woodside is targeting FID this year.

Government support and finding offtake  

Last year, the USD 504m loan guarantee for the US Department of Energy was a huge boost for the ACES Delta in Utah, Susan Fernandez, senior director of strategy at ACES-Delta, said.

That kind of support from governments and legislatively mandated decarbonization quickens the proliferation of new hydrogen technologies and projects.

“Others will also have the ability to receive more loan guarantee dollars,” Fernandez said of the post-IRA landscape. “We’ll see more projects come to the space.”

Still, offtake is key to reaching bankability, Charrier said.

“The key is always the offtake,” she said. Rather than a chicken-and-egg metaphor, she said she likes to mention a domino effect. “Yes, at the beginning we’ll have to pay a premium, but if it’s driven by a net-zero commitment everything will fall into place.”

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