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NET Power and Rice Acquisition garner additional $275m PIPE commitments

The original transaction in December concerns NET Power’s 300 MW Serial Number 1 project near Odessa, Texas.

ET Power and Rice Acquisition Corp. II have announced an additional $275m of PIPE commitments in connection with their proposed business combination, according to a news release.

Occidental has increased its commitment to the PIPE by $250m, bringing its total investment to $350m, while the Rice family has committed an additional $25m, bringing their total investment to $125m.

“We believe NET Power’s technology can accelerate emissions reductions in our existing operations and ultimately supply emissions-free power to the Direct Air Capture facilities and sequestration hubs we are developing, the release states.”

The new commitments bring the expected gross proceeds of the business combination to $845m for NET Power, consisting of approximately $345m from RONI’s trust account (assuming no redemptions), and approximately $500m from the PIPE raised entirely at $10 per share of common stock.

Assuming no RONI shareholders exercise their redemption rights, the combined company is expected to have a market capitalization in excess of $2bn.

“Since announcing the transaction in December 2022, NET Power has continued to make excellent progress towards commercialization of its utility-scale power plant, including FEED commencement on the Occidental-hosted Serial Number 1 (“SN1”) project near Odessa, Texas,” the release states. “In support of the plant, NET Power expects Occidental will be a key offtaker of the clean power generated by SN1.”

It is anticipated that Occidental will manage the transportation, storage, and utilization of the captured CO2 from SN1.

“We believe NET Power’s technology can accelerate emissions reductions in our existing operations and ultimately supply emissions-free power to the Direct Air Capture facilities and sequestration hubs we are developing,” Vicki Hollub, president and CEO of Occidental, said in the release.

Following this additional commitment, Occidental’s ownership stake in the combined company will increase to approximately 39%, assuming no redemptions.

NET Power expects $200m of net proceeds from the business combination and the PIPE to fully fund corporate operations through commercialization of SN1, which is expected to be operational in 2026.

The net proceeds above $200m are expected to support SN1 capital needs and future commercial origination efforts.

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Gevo: equity investors for SAF plant standing by

Gevo executives said equity investors are standing by to finance its proposed alcohol-to-jet facility in Preston, South Dakota, pending finalization of a loan guarantee from the Department of Energy.

Equity investors are standing by for Gevo’s Net-Zero 1 alcohol-to-jet fuel facility to reach terms on a DOE loan guarantee that would help finance construction of the plant in Preston, South Dakota.

Colorado-base Gevo is working with the DOE and independent experts to structure the guarantee, and once terms are finalized, the company will “ramp up the third-party equity capital raise and work towards a close of funding necessary to finance the project construction budget and all the project finance elements such as interest during construction, various reserves, and transaction costs,” Gevo CEO Patrick Gruber said on an earnings call last week.

“Equity investors are standing by for a clear line of sight to the debt terms, which is underway and will be announced when the DOE term sheet is agreed,” he said.

Gruber said the company plans to spend between $125m and $175m of additional capital to reach FID on the project, in addition to over $100m already spent. He added that the capital from Gevo will be reimbursable upon FID, but that the company would likely reinvest that money to take a big chunk of the equity in the project.

Gevo expects that Net-Zero 1 would have the capability to produce approximately 60 million gallons per year (MGPY) of liquid hydrocarbons in the form of jet fuel and renewable gasoline, using corn as feedstock. It plans to use green hydrogen produced onsite as well as CCS that flows out through the proposed Summit Carbon Solutions CO2 pipeline. Executives at the company have previously said the Net-Zeto 1 project would not work if the Summit pipeline is not built.

The company is partnered with Zero6, a Minneapolis-based renewables developer, which in February 2024 launched a process to raise $340m in project capital for its portion of the project: 20 MW of green hydrogen production adjacent to Net-Zero 1 powered by a 99 MW wind farm located 10 miles from the SAF site.

Gruber, citing a report from McKinsey, emphasized that the alcohol-to-jet pathway is the cheapest form of carbon abatement, at about $450 per ton of carbon abated, compared to the next-cheapest HEFA process fuels at between $600 – $700 per ton (all before federal and state incentives).

Publicly listed Gevo in February received notice it was not in compliance with NASDAQ listing requirements as its stock price has remained below $1 for 30 consecutive business days.

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Tree Energy Solutions and EWE building electrolyzer in Wilhelmshaven

The electrolzser, to be installed and operated starting in 2028, has a planned total capacity of 1 GW at the hub on the North Sea coast.

Tree Energy Solutions and German utility EWE are signing an MoU to build an electrolyzer in TES’ Green Energy Hub in Wilhelmshaven, Germany, according to a press release.

The electrolzser, to be installed and operated starting in 2028, has a planned total capacity of 1 GW.

The hub in Wilhelmshaven is on the North Sea coast and can accommodate up to 2 GW capacity electrolyzers with renewable energy sources such as offshore wind.

In October Tree Energy Solutions agreed to terms for Fortescue Future industries to make an equity investment of EUR 30m to become a strategic shareholder in TES, and to invest EUR 100m for a stake in the construction of the import terminal in Wilhelmshaven. Before that the Belgium-based company concluded its second fundraising round at EUR 65m.

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Braya issues green hydrogen provision RFP

The Canadian company has plans to use green hydrogen as a feedstock and to export green ammonia to domestic and international offtakers.

Braya Renewable Fuels has issued an RFP for the provision of green hydrogen as a feedstock for its refinery operations in Come By Chance, Newfoundland and Labrador, according to a press release.

Proposals are to be submitted by 19 December of this year.

Braya could also export green ammonia to local, regional, and international markets. The company is now repositioning the facility to produce renewable diesel and sustainable aviation fuel (SAF).

“Our production of renewable diesel requires substantial amounts of hydrogen feedstock every year,” the release states. “Braya has existing access to grey hydrogen; however, to produce the lowest carbon intensity rating possible, Braya is interested in acquiring green hydrogen to support its operations.”

At approximately 35,000 metric tons, the project would be the largest domestic green hydrogen project in Canada to date.

The operational footprint of the refinery, ample access to water, and existing infrastructure mean that production could be scale beyond Braya’s operational needs.

“Braya is open to capitalizing on potential opportunities with the successful proponent to scale green hydrogen and green ammonia production, storage, and handling to serve a larger market audience,” the release states. “… we have issued this RFP to solicit parties to support us with developing and exploring this opportunity.”

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Exclusive: OCI Global exploring ammonia and methanol asset sales

Global ammonia and methanol producer OCI Global is working with an investment bank to explore a sale of ammonia and methanol assets as part of the re-opening of its strategic business review.

OCI Global is evaluating a sale of several ammonia and methanol assets as part of the re-opening of its strategic business review.

The global producer and distributor of methanol and ammonia is working with Morgan Stanley to explore a sale of its ammonia production facility in Beaumont, Texas, as well as the co-located blue ammonia project under development, according to sources familiar with the matter.

The evaluation also includes OCI’s methanol business, one of the sources said.

Representatives of OCI and Morgan Stanley did not respond to requests for comment.

As part of the earlier strategic review announced last year, OCI in December announced the divestiture of its 50% stake in Fertiglobe to ADNOC, and the sale of its Iowa Fertilizer Company to Koch Industries, bringing in $6.2bn in total net proceeds.

However, OCI has received additional inbound inquiries from potential acquirers for the remaining business, leading it to re-open the review, CEO Ahmed El-Hoshy said last month on OCI’s 4Q23 earnings call.

“As such, OCI is exploring further value creative strategic actions across the portfolio, including the previously announced equity participation in its Texas blue clean ammonia project,” he said, adding: “All options are on the table.”

The comments echoed the remarks of Nassef Sawiris, a 40% shareholder of OCI, who recently told the Financial Times that OCI could sell off most of its assets and become a shell for acquisitions.

In the earnings presentation, El-Hoshy took time to lay out the remaining pieces of the business: in particular, OCI’s 350 ktpa ammonia facility in Beaumont; OCI Methanol Group, encompassing 2 million tons of production capacity in the US and a shuttered Dutch methanol plant; and its European ammonia/nitrogen assets.

Texas blue

The Texas blue ammonia project is a 1.1 million-tons-per-year facility that OCI touts as the only greenfield blue ammonia project to reach FID to date. The company has invested $500m in the project as of February 24, out of a total $1bn expected investment, according to a presentation.

“Commercial discussions for long-term product offtake and equity investments in the project are at advanced stages with multiple parties,” El-Hoshy said. “This reflects the very strong commercial interest and increasing appetite from the strategics to pay a price premium to secure long-term low-carbon ammonia.”

El-Hoshy’s comments highlight the fact that, unlike most projects in development, OCI took FID on the Texas blue facility without an offtake agreement in place. The executive did, however, highlight the first-mover cost advantages from breaking ground on the project early and avoiding construction cost inflation.

Additionally, the project was designed to accommodate a second 1.1 mtpa blue ammonia production line, which would be easier to build given existing utilities and infrastructure, El-Hoshy said, allowing for an opportunity to capitalize on additional clean ammonia demand at low development costs.

“Line 2 probably has the biggest advantage, we think, in North America in terms of building a plant where a lot of the existing outside the battery limits items and utilities are already in place,” he said, emphasizing that by moving early on the first phase, they avoided some of the inflationary EPC pressures of recent years. 

At the facility OCI will buy clean hydrogen and nitrogen over the fence from Linde, and Linde, in turn, will capture and sequester CO2 via an agreement with ExxonMobil.

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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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