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Nutrien suspends Louisiana blue ammonia project

Nutrien executives today said the company had suspended work on its proposed 1.2 million tonne clean ammonia project in Geismar, Louisiana, citing higher cost estimates and demand uncertainty.

Nutrien executives today said the company had suspended work on its proposed 1.2 million tonne clean ammonia project in Geismar, Louisiana.

The Canada-based fertilizer company said the decision is due to an “increase in expected capital costs compared to our initial estimates, continued uncertainty on the timing of emerging uses for clean ammonia.”

Nutrien last year said the project would cost approximately $2bn to build and achieve a 90% reduction of CO2 emissions. It would have begun construction in 2024 and reached commercial operations in 2027.

On an investor call today, Nutrien CEO Ken Seitz said that estimated costs for the project had climbed between 15% – 20%.

“We believe emerging uses for clean ammonia will provide a long-term growth opportunity for the nitrogen industry, but there continues to be uncertainty on the timing of this demand,” Seitz said in prepared remarks.

Another Nutrien executive, Trevor Williams, said the company built in incentives from the IRA into its investment model, but the added tailwind did not get the company “over the hurdle” on the project’s economics. He added that the halting of work would imply a delay of at least two years for the project.

Discussing a potential pricing premium for clean ammonia, Chief Commercial Officer Mark Thompson said “today the evidence wouldn’t be sufficient to justify the assumption of a premium, at least in the near term, emerging for clean ammonia.”

Nutrien had signed a letter of intent with Mitsubishi Corporation for offtake of up to 40% of expected production from the 1.2 million ton per year plant to deliver to the Asian fuel market, including Japan.

The company also reduced capex plans for smaller investment projects in its retail business and deferred the timing of capital spend on certain nitrogen brownfield projects.

The Hydrogen Source is tracking 12 proposed blue ammonia projects in the US and Canada that have been announced in recent years.

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OCI CEO: Blue ammonia as maritime fuel could hit $900 per ton

OCI executives today touted the prospects for their Texas blue ammonia plant, the only such project currently under construction in the US. They were discussing the company’s focus on decarbonizing growth opportunities following recently completed asset sales worth $6.2bn in net proceeds.

Prices for blue ammonia as a maritime fuel could come in at $900 per ton, a prospect that underscores OCI Global’s enthusiasm for its focus on decarbonizing energy transition projects.

OCI CEO Ahmed El-Hoshy made the remark today in discussing the company’s recently announced asset sales that will bring in roughly $6.2bn in net proceeds, which will be used to reduce debt, return value to shareholders – and make additional investments in energy transition projects.

The company launched a strategic review of its asset portfolio earlier this year under pressure from activist investor Inclusive Capital.

Announced Friday, OCI offloaded its 50% stake in fertilizer producer Fertiglobe to Abu Dhabi National Oil Company (ADNOC) in a deal worth $3.62bn. OCI and ADNOC separately announced they will explore opportunities for collaboration on joint venture investments in development projects in decarbonization and product distribution across North America and Europe. 

Today, OCI announced it has reached a deal to sell 100% of the equity interests in Iowa Fertilizer Company to Koch Ag & Energy Solutions for $3.6bn. OCI was advised by Morgan Stanley as financial advisor on the transaction and Cleary Gottlieb served as legal counsel.

Texas Blue

The company’s biggest investment globally is the 1.1 million ton Texas blue ammonia project, which is in development with partners Linde and ExxonMobil. OCI is in talks with Asian offtakers and other strategics about phase 1 offtake and a minority equity investment in that project. El-Hoshy also said previously the company is exploring adding a second line to expand production at the site. 

“Once the first line has some of that ammonia spoken for, that second line has the benefit of a lot of the utilities, the off-site being already in place, so that we’re talking about mainly inside the battery limit-type investments save for a few utility-type investments,” he said.

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Trafigura takes majority stake in hydrogen subsidiary

Trafigura Group will increase its shareholding in H2 Energy Europe AG to become majority owners. The firm is developing a 1 GW green hydrogen facility in Denmark, among others.

Trafigura Group Pte has agreed with H2 Energy Holding AG founders to increase its shareholding in H2 Energy Europe AG to become majority owners, as development plans ramp up for large-scale green hydrogen production projects and mid- and downstream hydrogen supply and distribution infrastructure in Europe.

H2 Energy Holding AG’s founders retain a minority ownership and will continue to contribute their extensive knowledge and expertise to the company.

In addition, Trafigura retains its support for and minority equity interest in H2 Energy Holding AG, which will continue to focus on developing green hydrogen eco-systems and green hydrogen technologies, according to a news release.

Rolf Huber, Founder of H2 Energy remarked: “This is a welcome development that strategically positions both companies for future growth and investment. As we move forward, our primary objective is to fortify our green hydrogen eco-system, focusing on infrastructural engineering projects, the development of fuel cell applications, and the development and commercialization of key hydrogen equipment. Collaborating closely with Trafigura, we aim to leverage each other’s expertise to advance our shared goal of making green hydrogen a cornerstone of the energy system.”

Julien Rolland, Head of Strategic Projects and Investments for Trafigura said: “Today’s announcement allows H2 Energy Europe to focus on developing large-scale green hydrogen projects and distribution networks across Europe, while H2 Energy Holding AG will focus on its core business and technology development. Trafigura and H2 Energy Holding AG will continue to co-operate closely and benefit from each partner’s respective expertise.”

Plans to build a 1 GW green hydrogen facility in Esbjerg, Denmark are progressing, with COWI commissioned in June this year to conduct the front-end engineering design (FEED) for the production plant. A final investment decision is expected in 2024.

In South Wales, H2 Energy Europe has recently submitted a formal planning application to construct a 20 MW green hydrogen production facility within the port of Milford Haven in South Wales, with local company InSite Technical Services Ltd currently undertaking the FEED study. The project has reached the final negotiation stage for funding under the UK government’s Hydrogen Business Model and Net Zero Hydrogen Fund: Electrolytic Allocation Round 2022, with final projects expected to be announced this year. Subject to government support, the facility should be commissioned within two years, using domestic renewable energy to produce green hydrogen for shipping and road transport, as a chemical feedstock and to provide power for industrial use across the South Wales Industrial Cluster.

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Fusion Fuel US leaders to step down

Portugal-based Fusion Fuel’s US co-presidents are stepping down to pursue other opportunities in the hydrogen and clean fuels sector.

Zachary Steele and Jason Baran have decided to leave Fusion Fuel and will be stepping down from their roles of Co-Head and Chief Commercial Officer, respectively, as well as Co-Presidents of the Americas, to pursue other opportunities in the hydrogen and clean fuels sector.

The moves were announced as part of the company’s 1Q23 earnings release.

Steele said in an interview late last year that the company was working with RBC Capital Markets to develop projects in the US.

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EXCLUSIVE: 8 Rivers co-founder departs firm

A co-founder and executive has departed the North Carolina-based firm, which recently announced an ammonia project in Texas.

Bill Brown, a co-founder of the technology commercialization firm and clean fuels developer 8 Rivers Capital, has retired from the company, a spokesperson confirmed via email.
According to Brown’s LinkedIn profile, he is serving now as CEO of New Waters Capital. He co-founded 8 Rivers and also served as CEO and CTO in this nearly 16 years there.
Brown did not respond to a request for comment.
According to 8 Rivers’ website, Dharmesh Patel is serving as interim CEO. The company recently announced development of the Cormorant Clean Energy ammonia production facility in Port Arthur, Texas
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Exclusive: TransGas CEO talks mega ammonia project

The owners of a proposed colossal ammonia production facility in Appalachian coal country are in the beginning stages of seeking liquidity, EPC contracting, and advisory services for a project they say will ultimately be financed akin to an LNG export terminal.

It’s an appeal often made in modern US politics – doing right by those left behind.

Perhaps no place is more emblematic of that appeal than West Virginia, and perhaps no region in that state more so than the southern coal fields. It’s there a fossil developer is proposing the architecture of the ruling coal industry be used to build a $10bn decarbonized ammonia facility and is gathering the resources to do so.

“It’s world class, and it makes southern West Virginia, Mingo County, the catalyst for the 21st century’s energy revival,” said Adam Victor, the CEO of TransGas Development Systems, the developer of the project. “The people [here] are the heirs and descendants of the people that mined the coal that built the steel that built the Panama Canal.”

The Adams Fork Energy project in Mingo County, jointly developed by TransGas and the Flandreau Santee Sioux Tribe, is slated to reach commercial operations in 2027. Six identical 6,000 mtpd ammonia manufacturing plants are being planned on the site of a previously permitted (but not constructed) coal-to-gasoline facility.

ReSource exclusively reported this week that the state has issued a permit to construct the facility. TransGas owns 100% of the project now, though if the Tribe comes through with federal funding then it will become the majority owner.

TransGas itself could take on a liquidity partner to raise up to $20m in development capital for the project, Victor said. The company is not using a financial advisor now but will hire one in the future.

White & Case is TransGas’ legal advisor. The company is in discussions with Ansaldo Energia, of Italy, about construction.

“The project is not averse to talking to private equity or investment bankers, because nothing has been decided right now,” Victor said, noting that the company is just beginning talks with infra funds and is eager to do so. “The project will be looking for an EPC.”

The first of the six plants will cost about $2bn, but each one will get successively less expensive, Victor said. Total capex is about $10bn, though there is discussion of acquiring adjacent land to double the size of the project – or 12 plants in all producing 6,000 mtpd each.

TransGas has the support of West Virginia politicians like Sen. Joe Manchin and Gov. Jim Justice, Victor said. Financing the project will be a function of the offtake.

Electricity for data centers, or ammonia for export?

The company is conducting a market analysis to determine avenues for offtake, Victor said. They could do partial electricity generation onsite to power a data center, with the remainder of the hydrogen being used to make ammonia for shipment overseas.

Depending on the needs of offtakers, the facility could also do one or the other entirely, he said.

The project, if configured at current size, could support about 6,000 MW of non-interruptible power generation, 2,000 MW of that for cooling.

“This could basically become a 6,000 MW campus to become the center of data centers in the United States,” Victor said, noting that the region is much less prone to natural disasters than some others and is high enough in elevation to escape any flooding. “I think we could rival Loudoun County [Virginia] as where data centers should be located.”

Adams Fork sits on the largest mine pool reservoir in the eastern US, Victor noted. Data centers need constant cooling, particularly new chip technology that requires liquid cooling.

TransGas will know in a matter of weeks if it’s going to go the electrical route, Victor said. There are only five companies in the world with data centers large enough to efficiently offtake from it: Amazon, Microsoft, Google, Meta and Apple.

If not, the facility will continue down the path of selling the decarbonized ammonia, likely to an oil company or international ammonia buyer like JERA in Japan.

Partnering with a tech company will make it easier to finance the project because of high credit ratings, Victor said. International pressure on oil companies could affect those credit ratings.

“We think the investor world could be split,” he said, noting tech and fuels investors could both be interested in the project. “You’re doubling the universe of investors and offtakers.”

He added: “Once we have the offtake, we think we could have a groundbreaking this year.”

Two ways of shipping

For ammonia production the facility could use the same shipping channels the coal industry uses – either to the Big Sandy River to be sent by barge on the Ohio to New Orleans, or rail to ports in Baltimore; Norfolk, Virginia; and Savanna, Georgia.

By rail, two 40-car trains per day would take ammonia to port. Norfolk Southern and CSX both operate in the region.

Another option is to have a fleet of 50 EV or hydrogen-powered trucks to transport ammonia to the Big Sandy where electric-powered barges can take it to the Gulf, Victor said. That latter option could mean a lower CI score because it will eliminate rail’s diesel power.

Mercedes-Benz and Volvo both make the kind of trucks used for this work in Europe and Asia, he said. Coal mines in the region use diesel trucks in fleets as numerous as 500, and the original TransGas coal plant was permitted for 250 trucks per day.

“This is something that our offtake partner is going to determine,” he said. Japan would likely want the ammonia in the Gulf of Mexico, whereas European shipping companies would want it on an Atlantic port.

The LNG financial model

The offtakers themselves could fund the facility, Victor said.

“The financial model for this is the financial model for funding LNG terminals,” he said. “The same teams that put those large facilities together, financial teams, would be the same teams that we’re talking to now.”

The offtakers may also dictate who they want to be the financial advisor, he said.

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exclusive

Quantron kicks off Series B equity raise

The German and American mobility provider is seeking to raise EUR 200m in a Series B equity raise, as the company plans to become a one-stop-shop for hydrogen-powered commercial vehicles, according to a teaser.

Quantron, the Germany and US-based hydrogen trucking manufacturer, is seeking to raise EUR 200m in a Series B capital raise, and has further plans to raise money in a Series C in 2024 or 2025, followed by an anticipated IPO beyond 2025.

The company plans to use proceeds from the Series B accelerate the roll-out of existing production and make additional market entries included expanding its operations in the US, according to a sale teaser seen by The Hydrogen Source. Stifel is leading the capital raise, as previously reported.

By advancing a full-scale zero-emission ecosystem, Quantron is seeking to take part in the sourcing and distribution of green energy and hydrogen, as well as building fuel cell and battery electric vehicles and components and offering customer solutions like aftersales, the teaser notes.

Quantron, which has offices in Augsburg, Germany and Detroit, Michigan, has brought in about EUR 28m in revenues since inception and expects EUR 60m in revenue this year, fueled by a EUR 100m order book and pipeline. The company has put 150 vehicles on the road to date and has 130 employees.

Its Series A capital raise of EUR 45m, completed in September, 2022, implied a EUR 250m pre-money valuation. The ongoing EUR 200m capital raise will come in the form of the Series B financing as well as working capital facilities.

The company recently announced commitments with FirstElement Fuel and Goldstone Technologies Limited. Quantron debuted its Class 8 hydrogen fuel-cell truck in the US at the Advanced Clean Transportation Expo in Anaheim, California in April.

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