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Puerto Rico shortists six in LNG-to-hydrogen plant RFQ

The shortlisted groups include Mitsubishi and Brookfield as anchor proponents.

Puerto Rico’s P3 authority has shortlisted six proponents for its LNG to hydrogen plant project, according to an emailed statement.

The request for qualifications was issued 1 March and calls for the island’s power authority, PREPA, to enter into a long-term contract with a private partner to identify a site location, design, permit, finance, construct, install, manage, operate and maintain the power facility.

The shortlisted firms are:

1.       CH4 Green Energy, LLC

a.       CH4 Green Energy, LLC

b.       Lindsayca, Inc.

2.       Eco-Renovable, LLC

a.       EcoRenovable, LLC

b.       Peerless Oil and Chemicals, LLC

3.       Haina Investment Co., Ltd.

4.       InterEnergy Group Limited

a.       InterEnergy Partners LP

b.       Brookfield Global Transition Fund

5.       Karpower International B.V.

6.       Tropigas de Puerto Rico, Inc.

a.       Tropigas de Puerto Rico, Inc.

b.       Cratos Project Services PR LLC

c.       Mitsubishi Americas Power Inc.

d.       NAES Corporation

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Exclusive: Modular green ammonia firm eyeing capital raise

A green ammonia firm with distributed modular technology is beginning discussions with advisors for future capital raises. It has $1bn of indicated interest in its global sales pipeline.

Talus Renewables is seeking to scale the deployment of its modular green ammonia offering with an additional capital raise.

The start-up is beginning discussions with potential bankers that could advise on a Series B capital raise, as its pipeline grows for distributed ammonia production systems that it can deliver globally, Co-Founder and CEO Hiro Iwanaga said in an interview.

Image: Talus Renewables

Talus offers containerized systems that produce green ammonia from power, water, and air, in the form of the TalusOne (up to 1.4 tonnes of green ammonia daily) and talusTen (up to 20 tonnes per day).

The company delivered its first system to Kenya Nut Company, a multinational agricultural firm in east Africa, under a 15-year fixed-price ammonia offtake agreement, Iwanaga said. The company has a pipeline of approximately $1bn of indicated interest for ammonia from potential customers, which include large farms and mining companies in several global jurisdictions, including the US.

He declined to comment specifically on how much the company would seek to raise in its next fundraising round, but said, “We have the demand for a $1bn worth of systems.” He added that, though the technology is largely proven, there is a perception of “young company risk” that the firm will need to overcome by delivering and operating its first systems.

Iwanaga, who views the company as a yieldco, required to raise several hundred million dollars every year to deploy its assets, is starting discussions with banks about advisory work for future capital raises.

“I think about our company as an infrastructure company,” he said. “We sign 10- to 15-year-long, fixed-price committed offtake agreements, and these projects earn 10% – 25% unlevered returns.”

A recently completed $22m Series A fundraising will fund the delivery of the next three to four systems before the end of the year, Iwanaga said, stretching Talus’ footprint to Europe and the US, with one more system heading to South America.

The company is deploying to large farms and mining companies, where ammonia is used as a blasting agent. In the US, the company has partnered with agribusiness Wilbur-Ellis and farmer-owned cooperative Landus, Iwanaga said.

Scaling quickly

While many green ammonia projects are popping up around the world, Iwanaga emphasizes that Talus will be able to deliver tons in the next 1 – 2 years, compared to the multi-year project timelines for larger projects requiring more complex supply chains.

“What we’re focused on is improving cost, reliability, and sustainability by driving local production – on-site or near-site production,” Iwanaga said.

Talus has several LOIs for offtake and is working to reach final agreements – work that takes several months at a good site and includes leasing land, permitting, and connecting to power.

The Talus systems are manufactured currently in China, Vietnam, and the US, but the company is moving the majority of its operations out of China and into Vietnam, while some of the Vietnam operations are moving to the US.

The company has partnered with a global auto OEM to lead its manufacturing, which has allowed it to scale quickly.

“Manufacturing a complex, high-temperature, high-pressure gas handling system is very difficult,” he said. “That [OEM] partnership has allowed us to scale in a way that I don’t think very many others have,” he said.

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JERA launches in-house venture capital effort

JERA will make strategic start-up investments in the energy transformation, including in hydrogen and ammonia value chains.

JERA Co., Inc. has initiated corporate venture capital activities with the aim of accelerating innovation in the energy domain and generating new business opportunities, according to a news release.

Led by JERA Ventures, a newly established in-house organization, this initiative will make strategic investments totaling $300m in start-up companies that have leading-edge technologies or business concepts and in venture capital funds that have close connections to such companies.

JERA Ventures, as “a sandbox for people who are serious about changing the world,” aims to be a good partner for start-up companies that are taking on the challenge of changing the world in the energy domain, acting as a bridge between them and JERA, the release states.

We will contribute to accelerated technological development, preconditioned on safety and regulatory compliance, not only through capital participation but also by providing the value of our strengths as one of the world’s largest energy companies, such as our facilities and our LNG, hydrogen, and ammonia value chains, for proof-of-concept1, demo or testing projects using actual assets or facilities. The following are the three main strategic technology areas for investment:

1. Energy transformation: Decarbonization technologies including making existing energy business smart, developing hydrogen and ammonia value chains, and renewables
2. Customer-centric: Digital technologies that offer new value to customers using digital energy platforms, AI, blockchains, etc.
3. Corporate: Well-being, femtech, and other technologies that contribute to the virtuous spiral of employee happiness and corporate value creation.

JERA’s mission is “to provide cutting edge solutions to the world’s energy issues.” Overcoming issues such as climate change, resource constraints, and energy security, we will continue to deliver a stable, economically sustainable clean energy. To achieve this, JERA Ventures will, with a strong sense of social responsibility and a belief in the power of imaginative innovation, co-create with visionary start-ups that brings new ideas or perspectives as it takes on the challenge of discovering new solutions that transcend received wisdom.

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Exxon to buy Denbury for $4.9bn

In acquiring Denbury, the oil major is advancing its strategy for carbon capture and transportation.

Exxon Mobil Corporation has entered into a definitive agreement to acquire Denbury Inc., an experienced developer of carbon capture, utilization and storage (CCS) solutions and enhanced oil recovery, according to a news release.

The acquisition is an all-stock transaction valued at $4.9bn, or $89.45 per share based on ExxonMobil’s closing price on July 12, 2023. Under the terms of the agreement, Denbury shareholders will receive 0.84 shares of ExxonMobil for each Denbury share.

“Acquiring Denbury reflects our determination to profitably grow our Low Carbon Solutions business by serving a range of hard-to-decarbonize industries with a comprehensive carbon capture and sequestration offering,” said Darren Woods, Chairman and CEO. “The breadth of Denbury’s network, when added to ExxonMobil’s decades of experience and capabilities in CCS, gives us the opportunity to play an even greater role in a thoughtful energy transition, as we continue to deliver on our commitment to provide the world with the vital energy and products it needs.”

The transaction synergies are expected to drive strong growth and returns for ExxonMobil. The acquisition of Denbury provides ExxonMobil with the largest owned and operated CO2 pipeline network in the U.S. at 1,300 miles, including nearly 925 miles of CO2 pipelines in Louisiana, Texas, and Mississippi – located within one of the largest U.S. markets for CO2 emissions, as well as 10 strategically located onshore sequestration sites. A cost-efficient transportation and storage system accelerates CCS deployment for ExxonMobil and third-party customers over the next decade and underpins multiple low carbon value chains including CCS, hydrogen, ammonia, biofuels, and direct air capture.

Chris Kendall, Denbury’s President and Chief Executive Officer commented, “This transaction is a compelling opportunity for Denbury to join an admired global energy leader with a low-carbon focus, a robust balance sheet and a leading shareholder return program. Over the last few years, Denbury has made significant progress executing our strategic plan, strengthening our enhanced oil recovery operations and capitalizing on our unrivaled infrastructure to accelerate the growth of our CO2 transportation and storage business. To build even further on this positive momentum, the Denbury Board of Directors and management team undertook a thorough review process and considered a number of alternatives to maximize long-term value. Through this process, it became clear that the transaction with ExxonMobil is in the best interests of our company, our shareholders, and all Denbury stakeholders. Importantly, given the significant capital and years of work required to fully develop our CO2 business, ExxonMobil is the ideal partner with extensive resources and capabilities. The all-equity consideration will allow Denbury shareholders to participate in the upside of ExxonMobil’s stock while benefitting from its strong capital return strategy. We look forward to bringing together our highly complementary cultures and teams to realize the long-term value and benefits of this combination.”

“Denbury’s advantaged CO2 infrastructure provides significant opportunities to expand and accelerate ExxonMobil’s low-carbon leadership across our Gulf Coast value chains,” said Dan Ammann, President, ExxonMobil Low Carbon Solutions. “Once fully developed and optimized, this combination of assets and capabilities has the potential to profitably reduce emissions by more than 100 million metric tons per year in one of the highest-emitting regions of the U.S.”

In addition to Denbury’s carbon capture and storage assets, the acquisition includes Gulf Coast and Rocky Mountain oil and natural gas operations. These operations consist of proved reserves totaling over 200 million barrels of oil equivalent, with 47,000 oil-equivalent barrels per day of current production, providing immediate operating cash flow and near-term optionality for CO2 offtake and execution of the CCS business.

The boards of directors of both companies have unanimously approved the transaction, which is subject to customary regulatory reviews and approvals. It is also subject to approval by Denbury shareholders. The transaction is expected to close in the 4th quarter of 2023.

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Midwestern SAF developer in capital raise

A municipal solid waste solutions firm based in the midwestern US is undergoing a $30m capital raise ahead of its first SAF project with plans to launch another raise late this year or early next.

Illinois Clean Fuels, the municipal solid waste solutions firm in Deerfield, Illinois, has mandated two advisors to run a capital raise, according to two sources familiar with the matter.

Chabina Energy Partners and Weild & Co. are assisting on the process, which the company plans to have finished by October, the sources said.

The equity will be put toward six recovery facilities to supply feedstock for an unannounced project located in the Chicagoland region, one of the sources said. Following two years or so of engineering and permitting, that project should enter construction.

In December or early 1Q24 ICF plans to launch another equity raise for development capital.

ICF, Chabina and Weild & Co. declined to comment.

Illinois Clean Fuels has a synthetic fuel plant under development that will convert municipal solid waste into sustainable aviation fuel in combination with carbon capture and storage, according to its website.

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AEM electrolyzer startup conducting Series B capital raise

A maker of anion exchange membrane electrolyzers is undergoing a Series B capital raise.

Versogen, an electrolyzer startup, is conducting a Series B capital raise, with the aim of closing the round in the coming weeks, CFO Tim Krebs said in an interview.

The Delaware-based maker of anion exchange membrane electrolyzers is seeking to raise multiples of its Series A capital raise, Krebs said, which was a $14.5m round completed in May, 2022.

Proceeds from the Series B would allow the company to complete development of its AEM electrolyzer, a 1 MW modular hydrogen generation system, Krebs said. The company is not using a financial advisor.

The Series A funding round was led by Doosan Corporation and its affiliate HyAxiom. Other investors include The Chemours Company, TechEnergy Ventures, Wenstone H2Tech, TOP Ventures America, a CVC arm of Thai Oil Public Company Limited, DSC Investment and CN Innovations Investments Limited. 

Krebs, a former investment banker who has been the CFO of three energy technology companies, expects some existing investors will also participate in Versogen’s Series B round.

Versogen is led by co-founder and CEO Yushan Yan, an electrochemical engineer and inventor. The company touts a technology using low-cost construction materials like an alkaline electrolyzer but a more efficient production process akin to a membrane-based PEM electrolyzer.

Market dynamics

The capital raise is taking place amid a crowded field of electrolyzer startups looking to raise money in order to finalize designs and cement commercial opportunities.

Among others, Electric Hydrogen, a PEM electrolyzer startup, recently raised a $380m Series C; Verdagy raised a $73m Series B in August; and HyAxiom, a developer and manufacturer of fuel cell and electrolyzer solutions, completed a $150m private placement of convertible preferred stock in July.

At the same time, growth equity as well as Series A and Series B funding for climate tech dropped significantly through the first half of 2023.

Series A funding fell 36%, while Series B funding dropped 20% and growth equity investments fell by 64%, according to data from Climate Tech Venture Capital. Series C funding dropped by 72% in 1H23 compared to the same period last year, the same data shows.

Still, the market for electrolyzers is supported by undersupply as green hydrogen projects advance around the world.

James Bowe, a partner at King & Spalding who is advising on several large green hydrogen projects, said the three top manufacturers of electrolyzers are sold out for the next three to four years, potentially providing an opportunity for startups to fill the gap. Bowe made the comments yesterday during a panel at the Reuters North America Hydrogen conference in Houston.

Additionally, several catalysts for further electrolyzer demand are on the near-term horizon. The US Department of Energy is expected to announce the winners of up to $8bn in government funding for hydrogen hubs this week, while guidance from the IRS detailing rules to qualify for green hydrogen tax credits should be issued in the coming months.

Further clarity on government support for the hydrogen industry is expected to spur many projects toward final offtake arrangements and final investment decisions, experts say.

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Exclusive: Renewable fuels firm hires advisor for topco raise

A renewable fuels firm with operations in California has hired a bulge bracket bank to raise project and platform capital for new developments in the Gulf Coast.

Oberon Fuels, a California-based renewable fuels developer, has hired Morgan Stanley for a topco and project capital raise to launch soon, CEO Rebecca Bordreaux said in an interview.

The company, backed by Suburban Propane, plans to reach COD on its next facility in the Gulf Coast in 2026, Boudreaux said. Late last year the company hired its first CFO Ann Anthony and COO Derek Winkel.

Oberon produces rDME at its Maverick Innovation Center in Brawley, California and recently established a partnership with DCC Fuels focused on Europe.

The location of the Gulf Coast facility is not public, Bordreaux said, though the company aims to reach FID on it this year. When operational it would produce 45,000 mtpy of methanol, or a comparative amount of rDME. Capex on the facility is in the range of $200m.

The company is shifting toward production of methanol as a shipping fuel, she said. New opportunities also include using DME as a renewable hydrogen carrier, as the fuel is easily transportable and compatible with many existing logistical networks.

Oberon is also preparing to issue $100m of municipal bonds from the state of Texas, Bordreaux said.

More than $50m has been raised by the company to date, with Suburban Propane being the largest investor and customer in California, Bordreaux said. The company has a third project in the pre-FEED phase.

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