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Nel exploring spin-off of fueling division

Nel is exploring spinning off its fueling division as a dividend-in-kind to all existing Nel ASA shareholders and applying for listing of the shares on the Oslo Stock Exchange this year.

Nel ASA (Nel) (OSE: NEL) has initiated a process to explore and prepare for a potential spin-off and separate listing of its Fueling division with the intention to create two independent pure-play companies aiming to become market leaders in their respective fields, according to a news release.

“We have seen limited synergies between the Fueling and Electrolyser divisions and believe each business will be better positioned to become market leaders in their respective fields by operating independently,” says Nel’s CEO, Håkon Volldal.

One year ago, when Nel presented its fourth quarter 2022 report, the company stated it was considering strategic actions for its Fueling division. Nel is now exploring spinning off the Fueling division as a dividend-in-kind to all existing Nel ASA shareholders and applying for listing of the shares in the separate fueling company on an OSE regulated market during 2024.

This will create two streamlined and focused companies that can pursue their individual strategic agendas. Nel will ensure that the independent fueling company will have a sufficient liquidity runway at the time of listing.

“The underlying market drivers for electrolysers and hydrogen fueling stations remain strong. We believe that two independent and focused companies represent the structure that maximizes the likelihood of success for each business and therefore long-term shareholder value,” Volldal says.

The decision to spin off and separately list the Fueling division has not yet been concluded and no assurances can currently be given that it will be completed. If completed, the shares of Nel (comprising its Electrolyser division) will remain listed on the OSE under the ticker “NEL”.

Carnegie AS has been engaged as financial advisor to assist Nel in this process, and Wikborg Rein Advokatfirma AS is acting as Nel’s legal counsel.

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Stonepeak acquires 50% stake in Virginia offshore wind farm

The infrastructure fund will acquire a 50% stake in Dominion’s Coastal Virginia Offshore Wind project for $3bn.

Stonepeak, a leading alternative investment firm specializing in infrastructure and real assets, today announced that it has reached an agreement with Dominion Energy to acquire a 50% interest in its Coastal Virginia Offshore Wind project through the formation of an offshore wind partnership.

The project is expected to be the largest offshore wind farm in the U.S. and one of the largest offshore wind farms globally upon completion.

CVOW is a 2.6 GW offshore wind project 27 miles off the coast of Virginia Beach, Virginia capable of serving the power needs of 660,000 homes.

Dominion Energy began developing CVOW in 2013 and is scheduled to begin offshore construction this spring. Construction is expected to be completed by year-end 2026. When fully constructed, each year CVOW will avoid carbon emissions equivalent to removing 1 million cars from the road, and will play an important role in supporting energy security and reliability, and lowering fuel costs by diversifying Dominion Energy customers’ energy supply.

Under the terms of the agreement, at closing Dominion Energy expects to receive proceeds of approximately $3bn, representing 50% of the CVOW construction costs incurred through closing less $145m (the initial withholding), Dominion said in a separate press release.

If the final construction costs of CVOW are $9.8bn or less, excluding financing costs, Dominion Energy will receive $100 million of the initial withholding. Such amount is subject to downward adjustment with Dominion Energy receiving no withheld amounts if the total costs, excluding financing costs, of CVOW exceed $11.3 billion. The transaction is expected to improve the company’s estimated 2024 consolidated FFO-to-debt by approximately 1.0% and reduce the company’s overall financing needs during construction.

Following closing, Dominion Energy and Stonepeak will each contribute 50% of the remaining capital necessary to fund construction of CVOW, provided the total project cost, excluding financing costs, is less than $11.3 billion (mandatory capital contributions). This represents 50/50 cost-sharing up to 15%, or nearly $1.5 billion, higher than the project’s current project budget ($9.8 billion) and up to 20%, or nearly $2.0 billion, higher than the project’s current pre-contingency budget ($9.45 billion).

“Having previously partnered with Dominion Energy, we look forward to extending our relationship through CVOW, which is a fitting addition to our global renewables strategy given its potential to provide meaningful renewable capacity to the U.S., advanced stage of development, and downside-protected fundamentals,” said Rob Kupchak, Senior Managing Director at Stonepeak. “Dominion Energy’s impressive track record building and operating large-scale infrastructure projects paired with Stonepeak’s experience successfully constructing offshore wind assets gives us confidence in CVOW’s path forward, and we are excited to partner with Dominion in delivering this critical renewable energy generation resource to its customers.”

Dominion Energy will continue to oversee CVOW’s day-to-day operations and construction at close, supported by Stonepeak’s expertise in investing in and delivering large and complex renewables and energy infrastructure projects including offshore wind. The transaction is subject to customary and regulatory approvals and is expected to be completed by the end of 2024.

Vinson & Elkins LLP served as legal advisor to Stonepeak. Mizuho Securities USA, through its affiliate Greenhill & Co., and Santander US Capital Markets LLC served as co-financial advisors.

McGuireWoods LLP and Morgan Lewis served as legal advisors to Dominion. Citi and Goldman Sachs & Co. LLC acted as sellside co-financial advisors for the transaction.

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French auto supplier gets €74m in public funding for hydrogen activities

The funding will support Plastic Omnium’s growth strategy for hydrogen mobility in France.

French automotive supplier Plastic Omnium has received €74m from the national government to support its growth strategy for hydrogen mobility in France.

The award was announced by Prime Minister Élisabeth Borne during a visit to Plastic Omnium’s α-Alphatech research and development center. The  public funding is part of the PIIEC (Important Project of Common European Interest) framework and supports projects considered essential for Europe’s competitiveness.

Laurent Favre, Plastic Omnium’s CEO, welcomed the government’s decision to support development of the hydrogen industry in France, and announced the construction in Compiègne of Europe’s largest hydrogen vessels factory. The future facility will produce  80,000 vessels a year, with the  first produced as of 2025. The new plant in Compiègne and its expansion of hydrogen activities in France will in time represent around 200 jobs.

Laurent Favre also announced the signing of two major contracts with Stellantis and HYVIA. Both contracts  cover the  design  and  production, at its future Compiègne plant, of 700-bar high-pressure hydrogen vessels modules for commercial vehicles. Laurent Favre declared that: “The support of the French government allows us to accelerate the ramp-up of our industrial production of hydrogen vessels in France. The signing of two new contracts with Stellantis and HYVIA illustrates our customers’ confidence in our technological expertise in hydrogen storage. These announcements are a major step in our ambition to become the world leader in hydrogen mobility by 2030 and the preferred partner of the players in this sector, serving the profound transformation of our industry towards low-carbon mobility”.

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Cement plant being decarbonized by TotalEnergies and Holcim

TotalEnergies and Holcim in Belgium have signed an MOU to work on the decarbonization of a cement production facility in Obourg, Belgium.

TotalEnergies and Holcim in Belgium have signed an MOU to work on the decarbonization of a cement production facility in Obourg, Belgium, according to a news release.

Various energies and technologies will be assessed for the efficient capture, utilization, and sequestration (CCUS) of around 1.3 million metric tons of CO2 per year.

The partnership will implement a new air-oxyfuel switchable kiln to capture and CO2 in the flue gases and TotalEnergies will use that CO2 for an e-fuel producing scheme and/or deposit it in geological storage in the North Sea.

“TotalEnergies will assess the development of renewable projects to power a new electrolyzer, which would generate the green hydrogen needed to produce e-fuels,” the release states. “This new renewable energy production capacity would also power Holcim’s new oxyfuel kiln, thus contributing to the decarbonization of the cement plant. Finally, the oxygen emitted by the electrolyzer would be used to fuel the new kiln.”

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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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Midwestern SAF developer in capital raise

A municipal solid waste solutions firm based in the midwestern US is undergoing a $30m capital raise ahead of its first SAF project with plans to launch another raise late this year or early next.

Illinois Clean Fuels, the municipal solid waste solutions firm in Deerfield, Illinois, has mandated two advisors to run a capital raise, according to two sources familiar with the matter.

Chabina Energy Partners and Weild & Co. are assisting on the process, which the company plans to have finished by October, the sources said.

The equity will be put toward six recovery facilities to supply feedstock for an unannounced project located in the Chicagoland region, one of the sources said. Following two years or so of engineering and permitting, that project should enter construction.

In December or early 1Q24 ICF plans to launch another equity raise for development capital.

ICF, Chabina and Weild & Co. declined to comment.

Illinois Clean Fuels has a synthetic fuel plant under development that will convert municipal solid waste into sustainable aviation fuel in combination with carbon capture and storage, according to its website.

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Air Products CEO discusses mega-scale green hydrogen project with AES

Air Products CEO Seifi Ghasemi further discussed its JV with AES Corporation to develop a $4bn green hydrogen project in Texas, noting that roughly half the price tag would come from developing 1.4 GW of renewables to feed the electrolyzers.

Air Products and AES Corporation will form a JV to develop a $4bn integrated green hydrogen facility in Texas, with roughly half of the cost coming from development of 900 MW of wind and 500 MW of solar generation, and the other half for the hydrogen build-out, Air Products CEO Seifi Ghasemi said on an investor call today.

Similar to his company’s JV in Saudi Arabia, the 50/50 JV will develop, build, own and operate a facility in Wilbarger County, at the site of a decommissioned coal-fired plant, Ghasemi said on the call.

Air Products has an exclusive global agreement with thyssenkrupp for electrolyzers, and could include battery storage at the Texas site to help power the electrolyzers, he added.

A separate entity owned 100% by Air Products will be the sole offtaker from the facility, Ghasemi said, which will produce more than 100 mtpd for use in transportation and industrial markets.

The relationship between AES and Air Products is not exclusive, he said.

Air Products expects a minimum internal rate of return of 10%, Ghasemi said. The company is hoping the tax benefits of the project will result in a lower hydrogen price from the JV.

The amount of capital invested by Air Products will be determined by downstream uses, Ghasemi said. The company has yet to decide if it will build a liquefaction plant, transport gaseous hydrogen by pipeline, or convert the hydrogen to ammonia and ship it by rail.

When it was noted that there is not an existing pipeline connecting Wilbarger County to Air Product’s Gulf Coast pipeline, Ghasemi said he was being pressured to get more deeply in the topic than he wanted, but that the company was confident emerging industry in the area would provide the necessary offtake.

“We don’t have to send it all the way down 250 miles to our existing pipeline,” Ghasemi said. “There’s a lot of different options.”

Air Products will not issue new stock to dilute shareholders or jeopardize its A-rating, Ghasemi said.

The labor cost is “very low on these projects,” Ghasemi said. And customers are attracted to getting 30-year contracts not associated with the price of oil, natural gas or geopolitics.

Air Products is investing approximately $500m for a 35 metric ton per day facility to produce green liquid hydrogen at a greenfield site in Massena, New York, as well as liquid hydrogen distribution and dispensing operations.

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