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Pattern Energy signs green ammonia LOI with Germany’s Mabanaft

As part of the LOI, Mabanaft also plans to evaluate the opportunity to potentially become a co-investor next to Pattern Energy and share ammonia and infrastructure expertise.

German Energy company Mabanaft has signed a letter of intent with US-based Pattern Energy to consider a potential transaction for the supply to Mabanaft of green ammonia.

The green ammonia would be produced by Pattern Energy at the Port of Argentia, in the Canadian province of Newfoundland and Labrador, starting in 2027, according to a news release.

The green ammonia production would require a new production facility with an estimated production capacity of 400 tonnes of ammonia per day. As part of the LOI, Mabanaft also plans to evaluate the opportunity to potentially become a co-investor next to Pattern Energy and share ammonia and infrastructure expertise. The green ammonia, produced with wind energy and hydroelectricity, is expected to make an important contribution to supplying industry in northern Germany and beyond with energy from renewable sources.

The LoI was signed by representatives of both companies at Mabanaft’s headquarters in Hamburg in the presence of the German Federal Minister for Economic Affairs and Climate Action Habeck, the Canadian Minister for Energy and Natural Resources Wilkinson and Hamburg’s Senator for Economic Affairs Leonhard. Habeck and a political delegation from Canada also visited Mabanaft as part of their jointly organised German-Canadian Hydrogen and Ammonia Producer-Offtaker Symposium in Hamburg on 18 March 2024. The delegation trip included visits to companies in Hamburg that are engaged in hydrogen production, hydrogen storage or hydrogen use.

Hamburg’s Senator for Economic Affairs Dr Melanie Leonhard: “The planned collaboration will bring energy from Canadian wind to Hamburg! In future, hydrogen and its derivatives are to be produced with wind energy in the windy region and then transported by ship to the German hydrogen capital, Hamburg. Thanks to the strong industry here, there is security of supply for the energy-intensive industries. Through cooperation between the Port of Hamburg and our Canadian partners, we will help to create the necessary infrastructure on the Canadian side.”

The “New Energy Gate” in Hamburg is also set to play a key role in Mabanaft’s planned imports of green ammonia. The planned New Energy Gate Hamburg is to become Mabanaft’s first major hub for the import, storage and processing of fuels from renewable energy sources. In November 2022, Mabanaft announced plans to build up an import terminal for green energy in the Port of Hamburg, with the US company Air Products as an anchor customer. Volker Ebeling, Senior Vice President New Energy, Supply and Infrastructure at Mabanaft, says: “We are absolutely convinced that hydrogen and its derivatives will play a key role in the energy supply of industrialised nations. The Letter of Intent we have signed today with Pattern Energy is a renewed commitment to this path.”

Cary Kottler, Chief Development Officer of Pattern Energy says: “Pattern Energy is thrilled to be working closely with Mabanaft on the further development of the Argentia Renewables project in Newfoundland & Labrador.  As a renewable energy leader in North America, Pattern Energy seeks to partner with energy industry leaders in Europe to fully develop the potential of green fuels production and export infrastructure in North America. The Argentia Renewables project is well positioned to be an early mover in the green hydrogen economy and will serve as an important element in Europe’s energy transition.”

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Exclusive: CCUS developer advancing $600m Louisiana sequestration hub

Mercuria Energy-backed CapturePoint this week announced its first 45Q tax credit direct transfer deal for CO2 captured from an ethanol facility. We spoke to CEO Tracy Evans about the deal and what’s next for the CCUS developer, including potentially raising $600m in project finance for a Louisiana carbon capture hub.

CapturePoint LLC recently closed on its first 45Q tax credit direct transfer deal for CO2 captured from an ethanol facility in Kansas, a mechanism that will be a major component of the company’s earnings amid growth in CO2 capture and sequestration.

Meanwhile, the Allen, Texas-based CCUS developer could seek to raise approximately $600m as soon as next year for a sequestration hub in Louisiana, for which it has applied for two Class VI sequestration wells from the EPA, CEO Tracy Evans said in an interview.

Under the direct transfer deal deal, CapturePoint will transfer 45Q tax credits generated at the Arkalon ethanol facility in Liberal, Kansas to an unnamed buyer for 12 years. Since CapturePoint transports the CO2 to injection wells used for enhanced oil recovery, the company receives the 45Q benefit of $60 per ton for EOR activities.

At full capacity, the ethanol plant produces 250,000 metric tons of CO2 annually, but usually undergoes two turnaround processes per year, which reduces output. 

The Arkalon facility had a previously installed carbon capture unit that was re-built by CapturePoint, a project that was funded from the company’s existing cash flows from its EOR business as well as draws on its $100m borrowing line, Evans said. Under 45Q, existing carbon capture facilities of which 80% or more are rebuilt can qualify for the tax credits.

The direct transfer of the 45Q tax credits was done at a discount, though Evans declined to disclose the amount.

Additionally, CapturePoint is capturing and removing CO2 from CVR’s Coffeyville fertilizer plant, also in Kansas, for which it completed a tax equity deal last year that opened up a stream of revenues.

Class VI wells

Both the Coffeyville and Arkalon plant operations are owned by the CapturePoint oil company, acquired along with oil and gas operations in 2017.

But CapturePoint has launched a carbon management subsidiary, CapturePoint Solutions, which will focus on industrial emissions to Class VI sequestration wells.

The subsidiary could seek to raise around $600m as soon as next year to build out a planned hub, the Central Louisiana Regional Carbon Storage Hub (CENLA), Evans said. The capital expenditure for the project includes a pipeline, five to seven capture facilities, and the sequestration site.

“We would love to do project finance, but we’d like to potentially start spending money now” versus waiting for a permit to construct, he said. “That seems to be the gating item for a lot of the project finance guys.”

He expects the project will take around two years to construct, thus to keep it moving, the company could spend money now on things like right-of-way and equipment using its own cash flow, he added, along with equity commitments from existing investors.

“The CapturePoint Solutions model is essentially based on only 45Q revenues,” Evans said. “Whether we’re taking them or whether somebody is paying us the transportation and sequestration fee, it’s still coming from the 45Q credits.”

CapturePoint Solutions has applied for three Class VI wells, two in Louisiana associated with the CENLA hub, and another in Oklahoma. Evans expects to have drafts of the Class VI wells from the EPA by late this year at the earliest, but Louisiana’s recently established primacy over the Class VI process could speed things up.

Evans said the company has already signed up 1.5 million tons of CO2 emissions at the CENLA hub, where the proposed sites each have 7.5 million tons of sequestration capacity annually.

“We’re still in a process of signing up emitters,” he said. “There’s additional capacity in the area, so we could easily expand to a third site.”

CapturePoint Solutions has also signed an agreement with Azure for a greenfield SAF plant in Kansas, where CapturePoint Solutions will tie in and take away CO2 to its planned Oklahoma site.

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Hydrogen tech firm looking for distribution partners with eye on Series B

A Florida-based hydrogen technology company is hoping to find strategic partners with distribution networks as part of its impending Series A capital raise, with an eye on a much larger Series B later.

BoMax Hydrogen, the Florida-based hydrogen production technology firm, is searching for strategic partners with distribution networks as part of its soon-to-launch Series A capital raise, CEO Chris Simuro said in an interview.

BoMax, founded in 2014 and headquartered in Orlando, will launch a $15m Series A on November 1, Simuro said. The company has hired Taylor DeJongh to run the process, as recently reported by ReSource.

Greenberg Traurig is the company’s law firm, Simuro said. They use a regional accountant in Florida.

Taylor DeJongh is looking for three to five investors to put in between $3m and $5m each. BoMax is in discussions with French container shipping company CMA-CGM as a potential investor, he said.

“We are truly searching for distribution partners,” Simuro said, adding that company doesn’t envision itself touching the end-use customer.

The Series A funds should provide up to 24 months of runway and expand the company’s manufacturing capacity, Simuro said. A follow-on Series B capital raise will likely be $100m or more.

BoMax has raised some $5m to date, including from state government aerospace economic development agency Space Florida.

Funds from the Series A will be used to make a beta prototype, scale operations at the company’s labs in Orlando and prepare for commercial production.

No electrolysis

The company touts a novel technology making hydrogen from visible light without the need for solar electrolysis, according to a pre-teaser marketing document seen by ReSource. An alpha prototype has been awarded by the US Department of Energy.

Requiring a larger footprint, electrolysis can ultimately produce 38 liters of hydrogen per hour per square meter, Simuro said. BoMax believes it can reach 50 liters per hour in six months time.

“It replicates how hydrogen is made in the natural world,” Simuro said. “In order to do this globally, we are going to need partners.”

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Bloom Energy demonstrates 4 MW solid oxide electrolyzer

According to the company, the high-temperature, high-efficiency unit produces 20-25% more hydrogen per MW than commercially demonstrated lower temperature electrolyzers.

Bloom Energy has begun generating hydrogen from the world’s largest solid oxide electrolyzer installation at NASA’s Ames Research Center, the historic Moffett Field research facility in Mountain View, Calif, according to a news release.

This high-temperature, high-efficiency unit produces 20-25% more hydrogen per megawatt (MW) than commercially demonstrated lower temperature electrolyzers such as proton electrolyte membrane (PEM) or alkaline.

This electrolyzer demonstration showcases the maturity, efficiency and commercial readiness of Bloom’s solid oxide technology for large-scale, clean hydrogen production. The 4 MW Bloom Electrolyzer™, delivering the equivalent of over 2.4 metric tonnes per day of hydrogen output, was built, installed and operationalized in a span of two months to demonstrate the speed and ease of deployment.

“This demonstration is a major milestone for reaching net-zero goals,” said KR Sridhar, Ph.D., Founder, Chairman and CEO of Bloom Energy. “Hydrogen will be essential for storing intermittent and curtailed energy and for decarbonizing industrial energy use. Commercially viable electrolyzers are the key to unlocking the energy storage puzzle, and solid oxide electrolyzers offer inherently superior technology and economic advantages. Bloom Energy, as the global leader in solid oxide technology, is proud to share this exciting demonstration with the world: our product is ready for prime time.”

The current demonstration expands on Bloom’s recent project on a 100 kW system located at the Department of Energy’s Idaho National Laboratory (INL) which achieved record-breaking electrolyzer efficiency. In the ongoing project, 4500 hours of full load operations have been completed with a Bloom Electrolyzer™ producing hydrogen more efficiently than any other process – over 25% more efficiently than low-temperature electrolysis.

The INL steam and load simulations replicated nuclear power conditions to validate full capability of technology application at nuclear facilities, and the pilot results revealed the Bloom Electrolyzer producing hydrogen at 37.7 kWh per kg of hydrogen. Dynamic testing conducted at INL included ramping down the system from 100 percent of rated power to 5 percent in less than 10 minutes without adverse system impacts. Even at 5 percent of rated load, the energy efficiency (kWh/kg) was as good or better than other electrolyzer technologies at their 100% rated capacity. These results will be presented at the Department of Energy’s Annual Review Meeting in Washington DC on June 7, 2023.

“The amount of electricity needed by the electrolyzer to make hydrogen will be the most dominant factor in determining hydrogen production cost. For this reason, the efficiency of the electrolyzer, the electricity needed to produce a kilogram of hydrogen becomes the most critical figure of merit. This 4 MW demonstration at the NASA Ames Research Center proves that the energy efficiency of our large-scale electrolyzer is similar to the small-scale system tested at INL highlighting the strength of our modular architecture,” said Dr. Ravi Prasher, Chief Technology Officer of Bloom Energy. “The electrolyzer product is leveraging the Bloom platform knowhow of more than 1 GW of solid oxide fuel cells deployed in the field and providing approximately 1 trillion cumulative cell operating hours. The same technology platform that can convert natural gas and hydrogen to electricity can be used reversibly to convert electricity to hydrogen. With Bloom’s high-efficiency, high-temperature solid oxide electrolyzers, we are one step closer to a decarbonized future powered by low-cost clean hydrogen.”

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exclusive

Caliche CEO talks hydrogen and CO2 storage expansion

Following the acquisition of assets in Texas and California, Caliche Development Partners CEO Dave Marchese discusses opportunities for growth in the hydrogen and C02 storage market.

Caliche Development Partners II has made a pair of acquisitions with the aim of expanding into growing hydrogen and CO2 storage markets in Texas and California, CEO Dave Marchese said in an interview.

The company, which is backed by Orion Infrastructure Capital and GCM Grosvenor, this week announced the purchase of Golden Triangle Storage, in Beaumont, Texas; and the anticipated acquisition of Central Valley Gas Storage, in Northern California – two regions with increasing demand for storage to support variable power loads, natural gas liquefaction, and high penetrations of renewable resources.

Caliche and seller Southern Company did not use financial advisors for the transaction. Caliche used Willkie Farr as its law firm for the financing and the transactions.

Marchese, who has a private equity background and first worked on a successful investment in a fuel cell company in the year 2000, has also racked up years of experience investing in and operating underground storage assets. The Caliche team developed and sold a natural gas liquids and helium storage business – called Coastal Caverns – earlier this year.

“We know how to put things underground and keep them there, including very small molecules, and we have relationships with many of the customers that are using hydrogen today,” he said.

Roughly a third of the industrial CO2 emissions on the Gulf Coast come from the Golden Triangle area, a region in Southeast Texas between the cities of Beaumont, Port Arthur, and Orange. Much of this CO2 comes from the steam methane reformers that are within 15 miles of Caliche’s newly acquired Golden Triangle asset, Marchese said. The site is in similar proximity to pipelines operated by the air companies – Air Products, Air Liquide, and Praxair – that run from Corpus Christi to New Orleans.

“We’re within 15 miles of 90% of the hydrogen that’s flowing in this country today,” he added. “Pipeline systems need a bulk storage piece to balance flows. We can provide storage for an SMR’s natural gas, storage for its hydrogen, and we can take away captured CO2 if the plant is blue.”

The Golden Triangle site, which sits on the Spindletop salt dome, has room and permits for nine caverns total, with two currently in natural gas service. Three of those caverns are permitted for underground gas storage. “We could start a hydrogen well tomorrow if we had a customer for it,” Marchese said.

The Central Valley assets in Northern California are also positioned for expansion, under the belief that the California market will need natural gas storage for some time to support the integration of renewables onto the grid, he said. Additionally, the assets have all of the safety, monitoring and verification tools for sequestration-type operations, he added, making it a good location to start exploring CO2 sequestration in California. “We think it’s an expansion opportunity,” he said.

“Being an operator in the natural gas market allows us to enter those other markets with a large initial capital investments already covered by cash flowing business, so it allows us to explore incrementally the hydrogen and CO2 businesses rather than having to be a new entrant and invest in all the things you need to stand up an operation.”

Caliche spent $186m to acquire the two assets, following a $268m commitment from Orion and GCM. The balance of the financial commitment will support expansion.

“We’re capitalized such that we have the money to permit, build, and operate wells for potential CO2 sequestration customers,” he said. “The relationship with these stable, large investors also meets the needs of expansion projects: if somebody wanted not only a hydrogen well but compressors as well, we have access to additional capital for underwritten projects to put those into service.”

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exclusive

California Resources pursuing pipeline of blue molecule projects

Through a subsidiary called Carbon TerraVault, the upstream oil and gas producer will approach carbon capture and blue molecule production investments on a project-level basis to help meet California’s lofty decarbonization goals.

Through its subsidiary Carbon TerraVault, California Resources Corporation will approach carbon capture and blue molecule production investments on a project-level basis to help meet California’s lofty decarbonization goals, Chief Sustainability Officer Chris Gould said in an interview.

Carbon TerraVault is differentiated by its nature as a CCS-as-a-service company, Gould said, as most CCS projects are owned by emitters themselves.

“We are bringing to market a solution to decarbonize other parts of the California economy,” Gould said, noting that hydrogen producers, power plants and steel and cement makers are among potential clients. “We are out across the state, working with emitters.”

Carbon TerraVault is self-mandated to return one billion tons of carbon back into the ground, first as a gas and then pressurized into liquid. Revenue comes from the federal 45Q incentive and the California LCFS and related tradeable market.

The company has a JV with Brookfield Renewable for the first 200 million tons. That JV recently formed a separate JV with Lone Cypress Energy Services for a planned blue hydrogen plant at the Elk Hills Field in Kern County.

Carbon TerraVault will provide permanent sequestration for 100,000 MTPA at the facility, and will receive an injection fee on a per ton basis, according to a December 7 presentation.

In hiring Carbon TerraVault to provide CCS as a service, LoneCypress also invited the company to invest in the production, Gould said. The JV has the right to participate in the blue hydrogen facility up to and including a majority equity stake, the presentation shows.

“You should expect to see over time as we do more and more of these that we’re going to have multiple models,” Gould said of these partnerships and financial structures. A typical model may emerge as the industry matures.

The company could repeat that effort for “many more” blue hydrogen projects in the state, Gould said. “Green [hydrogen] is a longer-term proposition that is going to be based on renewable buildout,” he said. “Blue is kind of here now.”

Target market

Carbon TerraVault estimates that California’s total CCS market opportunity is between 150 MMTPA – 210 MMTPA, and is in discussions for 8 MMTPA of CCS, of which 1 MMTPA is in advanced discussions, the presentation shows.

Through California Resources’ Elk Hills land position of 47,000 acres and CO2 sequestration reservoirs, the company could attract additional greenfield infrastructure projects like the Lone Cypress Hydrogen Project and create a Net Zero Industrial Park, according to the presentation.

In that vein, Gould noted the huge need for decarbonized ammonia in California’s central valley agriculture, which today is imported from abroad.

“There is a need for clean hydrogen in California and it is best if it is created in California,” Gould said.

The JV with Brookfield funds Carbon TerraVault’s storage needs, Gould said. Investments in the production processes, such as the deal with Lone Cypress, will likely require additional capital.

Project level financing is a “default assumption,” Gould said, though that’s not set in stone. The company is working with a financial advisor but Gould declined to name the firm.

The scale of California’s hydrogen ambitions is far beyond what any one company can do, Gould said.

“If you’re an advisor that is working with a developer likeLone Cypress that is considering locating in California, then I would say give us a ring,” Gould said. “We’re the ones who are going to be able to do the sequestration there.”

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Exclusive: Geologic hydrogen startup raising Series A

A US geologic hydrogen startup that employs electric fracking with a pilot presence on the Arabian Peninsula is raising a $40m Series A and has identified a region in the midwestern US for its first de-risked project.

Eden GeoPower, a Boston-based geologic hydrogen technology provider, is engaged in raising a Series A and has a timeline on developing a project in Minnesota, CEO and co-founder Paris Smalls told ReSource.

The Series A target is $40m, with $10m being supplied by existing investors, Smalls said. This round, the company is looking for stronger financial investors to join its strategic backers.

The company has two subsidiaries wholly owned by the parent: one oil and gas-focused and one climate-focused. The Series A is topco equity at the parent level.

Eden was one of 16 US Department of Energy-selected projects to receive funding to explore geologic hydrogen; the majority of the others are academic lab projects. Eden has raised some $13m in equity and $12m in grant funding to date.

Beyond geothermal

Eden started as a geothermal resource developer, using abandoned oil and gas wells for production via electric fracking.

“We started seeing there were applications way beyond geothermal,” Smalls said. Early grant providers recommended using the electric fracking technology to go after geologic hydrogen reservoirs, replacing the less environmentally friendly hydraulic fracking process typically used.

A test site in Oman, where exposed iron-rich rock makes the country a potential future geologic hydrogen superpower, will de-risk Eden’s technology, Smalls said. Last year the US DOE convened the first Bilateral Engagement on Geologic Hydrogen in Oman.

Early developments are underway on a demonstration project in Tamarack, Minnesota, Smalls said. That location has the hollow-vein rocks that can produce geologic hydrogen.

“We likely won’t do anything there until after we have sufficiently de-risked the technology in Oman, and that should be happening in the next 8 months,” Smalls said. “There’s a good chance we’ll be the first people in the world to demonstrate this.”

Eden is not going after natural geologic hydrogen, but rather stimulating reactions to change the reservoir properties to make hydrogen underground, Small said.

The University of Minnesota is working with Eden on a carbon mineralization project, Smalls said. The company is also engaged with Minnesota-based mining company Talon Metals.

Revenue from mining, oil and gas

Eden has existing revenue streams from oil and gas customers in Texas and abroad, Smalls said, and has an office in Houston with an expanding team.

“People are paying us to go and stimulate a reservoir,” he said. “We’re using those opportunities to help us de-rick the technology.”

The technology has applications in geothermal development and mining, Smalls said. Those contracts have been paying for equipment.

Mining operations often include or are adjacent to rock that can be used to produce geologic hydrogen, thereby decarbonizing mining operations using both geothermal energy and geologic hydrogen, Smalls said.

“On our cap table right now we have one of the largest mining companies in the world, Anglo American,” Smalls said. “We do projects with BHP and other big mining companies as well; we see a lot of potential overlap with the mining industry because they are right on top of these rocks.

Anti-fracking

Eden is currently going through the process of permitting for a mining project in Idaho, in collaboration with Idaho National Labs, Smalls said.

In doing so the company had to submit a public letter explaining the project and addressing environmental concerns.

“We’re employing a new technology that can mitigate all the issues [typically associated with fracking],” Small said.

With electric fracturing of rocks, there is no groundwater contamination or high-pressure water injection that cause the kind of seismic and water quality issues that anger people.

“This isn’t fracking, this is anti-fracking,” Smalls said.
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