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PE firm commits $100m to CCS developer

Grey Rock Investment Partners made the commitment to CarbonCycle, a developer that primarily focuses on natural gas processing facilities.

Grey Rock Investment Partners, through its affiliated investment vehicles, today announced an agreement to make a controlling investment in CarbonCycle, LLC to fund additional growth of the company through a capital commitment of up to $100m.

CarbonCycle plans to use the committed capital to execute on its strategy to develop carbon capture and sequestration (CCS) projects, primarily focusing on natural gas processing facilities and other related industrial emitters. CarbonCycle’s leadership team has combined 100+ years of energy, engineering, and geological experience.

“We are excited about our partnership with the CarbonCycle team. With more than 450 natural gas processing facilities in the United States emitting more than 56 million metric tonnes of CO2 each year, we see a significant opportunity to mitigate carbon emissions and deliver healthy risk-adjusted returns for our partners,” said Matt Miller, co-founder and managing director at Grey Rock. “We believe the CarbonCycle team is well positioned to partner with midstream companies and other industrial emitters to attack this opportunity set.”

The company is led by Chief Executive Officer Rich DiMichele whose career spans more than 30 years in the energy industry, including extensive experience developing and operating midstream natural gas infrastructure, and Kent Bowker, EVP of Subsurface, who has more than 40 years of geology experience including for shale development with Mitchell Energy. Similarly, through its existing energy investments, Grey Rock has built a comprehensive in-house team with skill sets spanning all phases of energy development including subsurface geology, engineering, and land and title to support CarbonCycle in its project development efforts.

“We are excited to partner with Grey Rock. They have an exceptional track record of originating and managing valuable energy investments and are bringing the same creativity and focus to the energy transition space,” said DiMichele. “CarbonCycle joins a group of leading-edge portfolio companies within Grey Rock’s net zero opportunities fund, including Vault, Conduit, and Rebellion. Our focus on CCS opportunities with midstream and other industrial partners will complement and build on what Grey Rock and these other companies have already accomplished.”

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Energy Impact Partners closes decarbonization fund at USD 485m

The fund has already invested in 12 companies, including: Form Energy, Nitricity, Carbon America, Sublime Systems, Electric Hydrogen and Rondo Energy.

Energy Impact Partners has closed the EIP Deep Decarbonization Frontier Fund I LP, oversubscribed with global investor support, at $485m, according to a press release.

The fund will invest in climate technologies, focusing on companies that have achieved early technical validation but have not yet reached maturity at scale. It has already invested in 12 companies, including: Form Energy, Nitricity, Carbon America, Sublime Systems, Electric Hydrogen and Rondo Energy.

The investment in Electric Hydrogen was joined by Breakthrough Energy Ventures, Capricorn Technology Impact Fund, and Prelude Ventures.

Founded in 2015, EIP has enabled more than 350 contracts, more than $1bn in bookings and business to a portfolio of 100+ companies.

Including this fund, EIP has raised more than $3bn and saw the majority of existing strategic investors commit to the Frontier Fund, adding to a diverse LP base comprised of corporates, banks, sovereign wealth funds, family offices, high net worth individuals and foundations from North America, Asia and Europe.

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Alberta natural gas pipeline network in development

The CAD $2bn project consists of building approximately 200 kilometers of high-pressure natural gas pipeline and related control and compression facilities that will run from Peers, Alberta, to the northeast Edmonton area.  

Canadian Utilities Limited is developing an energy infrastructure project to expand capacity and enhance efficiency of Alberta’s natural gas network and drive lower-carbon economic growth in the province, according to a news release

The Yellowhead Mainline project will connect natural gas producers to key markets. The project is expected to provide gas supply for the more than $20 billion of investment and associated employment in Alberta for customers including the Dow Fort Saskatchewan Path2Zero project.

The project consists of building approximately 200 kilometers of high-pressure natural gas pipeline and related control and compression facilities that will run from Peers, Alberta, to the northeast Edmonton area.

Total investment for the project is expected to exceed $2bn. The expansion is expected to have the capability to deliver about 1,000 terajoules (or 1 billion cubic feet) per day of incremental natural gas delivery capacity and is planned to be on-stream in 4Q27 with construction expected to commence in 2026.

ATCO Energy Systems made capital expenditures of $1,213m ($1,130m excluding International Natural Gas Distribution) and capital investments of $1,219m ($1,136m excluding International Natural Gas Distribution) in 2023.

ATCO Energy Systems expects its capital investment to be in the range of $4.3bn to $4.7bn from 2024 to 2026.

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Oklo signs LOI for fast fission data center PPA

Oklo is partnering with Wyoming Hyperscale to deliver 100 megawatts of power to its data centers.

Oklo Inc., a fast fission clean power technology and nuclear fuel recycling company, announced its collaboration with Wyoming Hyperscale to supply 100 MW of clean power to a state-of-the-art data center campus, according to a news release.

The companies have signed a non-binding letter of intent outlining their intent to enter into a 20-year Power Purchase Agreement, highlighting Oklo’s commitment to providing reliable and scalable clean power solutions in response to the increasing demand for electricity driven by global digitalization and artificial intelligence (AI) adoption.

“As the widespread adoption of artificial intelligence increases, Oklo remains dedicated to providing clean, reliable, and affordable energy solutions to meet the needs of our data center partners. Our partnership with Wyoming Hyperscale underscores our commitment to advancing sustainable energy practices and supporting high-efficiency operations within the data center industry,” said Jacob DeWitte, co-founder and CEO of Oklo.

Trenton Thornock, Founder and Managing Member of Wyoming Hyperscale, emphasized the project’s commitment to reimagining traditional data center development practices. “Our goal is to create data centers with minimal environmental impact. This collaboration with Oklo perfectly aligns with our vision for sustainable, efficient operations. By merging sustainability with advanced technology, we are setting a new standard for the future of accelerated computing.”

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US hydrogen developer to raise $1bn in 2023

Avina Clean Hydrogen will need $600m or more of debt and between $200m and $300m of equity. Capital raising talks are focused on the operating company and project level.

Avina Clean Hydrogen, a U.S.-based developer of hydrogen production plants, will seek to raise approximately $1bn, or possibly more, in 2023, CEO Vishal Shah said in an interview.

The company will need $600m or more of debt and between $200m and $300m of equity, Shah said. Capital raising talks are focused on the operating company and project level.

Avina is also in discussions with potential investment bankers, but has not hired anyone yet, Shah said.

“The capital needs for us are going to continue to grow,” Shah said. “We are certainly open to bringing on additional partners.”

Four development projects have offtake agreements in place, Shah said. The first operational plant will open in Southern California next year or early 2024, followed by Avina’s 700,000 mtpa green ammonia project in the Texas Gulf Coast. Additional projects are underway in the Midwest.

Three of those projects, each with offtakers in place, will reach FID in 2023 and need project debt, Shah said.

Avina is engaged with half-a-dozen potential customers and will seek to develop additional projects within that existing footprint.

Renewable energy procurement is also an important concern for Avina; the Texas project alone will require 900 MW of renewable energy to power, Shah said. The company is in offtake discussions with regional IPPs, mostly in solar and battery storage, but could use help with those agreements. Shah declined to name the firm’s legal advisor.

Avina was founded more than three years ago and is principally backed by Hydrogen Technology Ventures, a firm headed by Shah.

An equity raise was completed in early Q4, Shah said, declining to provide details. The company has a “large industrial firm” as a strategic investor that it hopes to announce soon. Looking forward, the company will look for a second strategic investor, as well as project finance.

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California carbon transformation firm lands new CFO

The Bay Area company is looking toward a Series C before an IPO in a couple of years.

Jimmy Chuang, the former CFO for Strata Clean Energy, has left that company to take the same role at carbon transformation startup Twelve, according to two sources familiar with the matter.

Twelve recently completed a $130m Series B led by DCVC and has raised USD 200m in equity to date, the sources said.

The Bay Area company is looking toward a Series C that would be much larger, before an IPO in a couple of years, one of the sources said. The company is in talks with bulge bracket bankers now but has not hired anyone.

Twelve did not respond to requests for comment. Strata declined to comment.

Twelve creates materials, like chemicals and fuels, from captured carbon. The company recently signed an MoU with Microsoft and Alaska Airlines to collaborate on the production of sustainable aviation fuel.

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Green hydrogen developer in exclusivity with new investor

New York-based green hydrogen developer Ambient Fuels is in exclusivity with a new investor, with proceeds from the capital raise slated to fund project development and acquisitions.

Ambient Fuels, the New York-based green hydrogen developer, is in exclusivity with a new investor for a bilateral capital raise, CEO Jacob Susman said in an interview.

Susman declined to name the private equity provider but said the backing will allow Ambient to develop several projects, as well as acquire projects from other developers. The deal is proceeding without the help of a financial advisor.

Once the company reaches its run rate, Ambient plans to complete three to four projects per year costing $50m and up, Susman said, with the first expected to reach operation in 2025.

The company’s initial geographic focus is on the Gulf Coast, centered on the Port of Corpus Christi, Susman said. New York, California, the Pacific Northwest and traditional wind energy states in the Midwest and West are areas of additional work.

Hydrogen hubs

Ambient is closely following the DOE hydrogen hub applications process, Susman said. Which regions are awarded funding could make a difference for where the company locates new projects.

According to ReSource‘s project tracker, Ambient is involved in at least two of the hubs that were encouraged by the DOE to submit a final application: California’s Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES), and the Port of Corpus Christi Green Hydrogen Hub.

In 2021 Ambient completed a funding round led by SJF Ventures. Several other VC funds and angel investors also participated.

Open for offtake business  

Ambient is looking for offtakers in industries that use the molecules for feedstock and energy but need to meet decarbonization targets.

The company is working to provide hydrogen as an industrial feedstock and energy source to sectors including transportation, oil and gas, mining, glass and steel production and automobile manufacturing. Supplying hydrogen for ammonia fertilizer is another target market.

Advisors with clients in those industries should reach out to Ambient, Susman said.

M&A strategy

Ambient strives to be a fully integrated devco with the resources, capital and expertise to take a project to fruition, Susman said. Projects developed by smaller companies can look to Ambient as a buyer for their projects.

“We want to be a home for those great projects that are being developed independently,” Susman said. “Absolutely we will be acquiring projects.”

Smaller developers with good projects could also be targets for takeover with the backing from the new investor, Susman said. The firm could also make a technology buy in software for project development, operations, or possibly the equipment side, though Susman said there’s a low probability of that.

Financial advisors that have leads on good projects Ambient can acquire are welcome to pitch, Susman said.

Susman said he is not in a hurry to exit Ambient and can see the company being independently financed for years to come.

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