Potential offtakers of ammonia and hydrogen around the world want to take equity stakes in the projects that they will be offtaking from, Erika Taugher of Pattern Energy said last week.
The offtakers – fertilizer and industrial firms, commodities traders, and power conglomerates, mostly in Japan – are seeking to take equity ownership as a means of understanding the novel complexities involved in building first-of-kind projects, said Taugher, a director of green fuels at Pattern.
While initial conversations for offtake for Pattern’s projects involved more standard 10 to 20 year contracts, the negotiations have evolved to include equity stakes.
“All the conversations I’m having with these offtakers – they’re now interested in equity in the project,” she said. “I think that’s interesting to note because there’s so much uncertainty that these offtakers really want to get an inside view on where the money is going, how it’s being spent. They want to collaborate with us on the model. They want to know how many ships we’re sending to Europe a month.”
Pattern, which is owned by CPP Investments, is involved with the Port of Corpus Christi hydrogen hub, and is aiming to bring hydrogen from West Texas to Corpus Christi. The company is planning to export ammonia in the near term until hydrogen transport infrastructure is more mature, Taugher added.
Taugher detailed the main challenges for securing offtake for projects, including pending policy issues, questions about financeability, and logistics.
Pattern and its partners are collaborating with a company that is building a 500-mile pipeline from West Texas to the Gulf, she said. Shared infrastructure with other large players at the Port of Corpus Christi helps to keep costs down.
The company is nearing a deal for offtake, and is openly sharing project information with various potential counterparties, she said, “one of which the exclusivity period ends and we go right into negotiations on the offtake contract before the end of the year.”
