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RNG, SAF and biomass projects backed by Canadian government

Public funding to three companies is meant to aid development of six separate RNG, SAF and woody biomass-to-electricity projects across the country, including two in the Niagara region.

The federal government of Canada will invest CAD $15m to support six clean fuels projects across the country, including CAD $10m for two projects in the Niagara region, according to a news release

The federal investments include:

  • $4.6 million to StormFisher Hydrogen to support a front-end engineering (FEED) study for a renewable natural gas (RNG) production facility at BMI’s Multimodal Hub in Thorold, Ontario.
    • Upon the completion of the FEED study in the summer of 2025 and construction of the planned CAD $200m production facility in 2027, StormFisher Hydrogen will combine renewable electricity from Ontario’s clean grid along with biogenic CO2 emissions from local industry to produce 1.25m gigajoules of RNG.
    • The project will support the decarbonization of the Canadian natural gas system and anchor a hydrogen hub in Thorold that will help attract other clean energy and technology businesses to the Niagara region.
  • More than CAD $5m to CHAR Technologies to support FEED studies that will enable CHAR to replicate their first-of-its-kind woody-biomass-to-renewable-energy facility in Thorold, Ontario in other parts of Canada.
    • Supported by an existing investment of $5 million from NRCan, CHAR is finalizing its construction of its clean fuels production facility at BMI’s Multimodal Hub in Thorold, which will convert woody biomass to renewable energy like RNG and biocarbon. The new NRCan funding announced today will enable CHAR Technologies to replicate this work at four new facilities in Kirkland Lake, Ontario; Drayton Valley, Alberta; and Saint Félicien and La Salle, Quebec and create a distributed network of low-carbon fuels production facilities across three provinces in Canada.
    • Taken together, the Thorold, Ontario, project — which is expected to reach commercial production this year — and the four other clean fuel production facilities in Kirkland Lake, Ontario, Quebec; and Alberta – which are expected to come online in the following two years — will maximize the value of underutilized waste wood resources and help decarbonize Canada’s steel and mining industries, and Canadian gas utilities.
  • CAD $5m to support Azure Sustainable Fuels Corp. in delivering a FEED study to support the construction and operation of a sustainable aviation fuels (SAF) production facility in Port Colborne, Ontario.
    • If the project reaches a positive Final Investment Decision (FID), following the completion of the FEED study, it is expected that the Azure’s SAF project would support approximately 1,500 construction jobs and 150 full time jobs during operations in Port Colborne, Ontario.
    • The FEED study is expected to be completed in by the end of 2024 and the construction of the planned facility would be commenced immediately following a positive FID.  The proposed project will be located on the north end of Port Colborne, Ontario, along the Welland Canal — a strategic location that will provide immediate access to local and global markets.
    • The planned processing facility in Port Colborne will leverage Canada’s agricultural sector to produce SAF that will meet the growing demand to help reduce emissions from the aviation sector.  Azure’s proposed project in Port Colbourne is one of three projects that Azure is progressing in Canada, with support from the federal government.

“We are leveraging Canada’s innovative clean tech companies and abundant range of feedstocks — including forest byproducts, agricultural crops and our low-emitting electricity grid — to grow Canada’s domestic production of clean fuels across the economy,” the release states.

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Regulatory: Construction permit issued for largest planned ammonia plant

A permit to construct a clean ammonia facility much larger than any in the world has been issued by West Virginia regulators.

The State of West Virginia has issued a permit to construct the world’s largest planned ammonia facility.

The Adams Fork Energy project in Mingo County, jointly developed by TransGas and the Flandreau Santee Sioux Tribe, is slated to reach COD in 2027. When fully built out, the six ammonia production plants would pump out 6,000 mtpd for domestic and international use.

ReSource previously reported on the issuance of the draft permit to construct, released by the West Virginia Department of Environmental Protection.

Offtakers in agriculture, shipping, and energy generation are all being explored for the project, according to a source familiar with the situation. Onsite electricity production for off-grid data centers is another possibility stakeholders are taking seriously.

Hydrogen produced by Adams Fork could produce up to 5,000 MW of electricity, the source said. Six Sigma could power co-located data centers without requiring a grid interconnection.

Coal mine waste methane is planned as a fuel source for the plant, which has access to the largest fresh water mine pool in the eastern US adjacent to the site.

The site is near Gilbert Creek, West Virginia, on a reclaimed coal mine.

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Verde Clean Fuels to develop lower carbon gas refinery in West Texas

The project would consume natural gas in the pipeline-constrained Permian Basin as feedstock, potentially mitigating the flaring of up to 34 million cubic feet of natural gas per day.

Verde Clean Fuels, Inc. and Cottonmouth Ventures LLC, a subsidiary of Diamondback Energy, have executed a Joint Development Agreement for the proposed development, construction, and operation of a facility to produce commodity-grade gasoline utilizing associated natural gas feedstock supplied from Diamondback’s operations in the Permian Basin.

The JDA provides a pathway forward for the parties to reach final definitive documents and Final Investment Decision for the proposed project, according to a news release. The JDA frames the contracts contemplated to be entered into between the parties, including an operating agreement, ground lease agreement, construction agreement, license agreement and financing agreements as well as conditions precedent to close, such as FID.

The expectation for the project is to produce approximately 3,000 barrels per day of fully-refined gasoline utilizing Verde’s patented STG+® process. By consuming natural gas in the pipeline-constrained Permian Basin as feedstock, the proposed project could demonstrate the ability to mitigate the flaring of up to 34 million cubic feet of natural gas per day, while also producing a high-value, salable product.

“The Verde Clean Fuels team is incredibly excited to finalize this JDA with Diamondback Energy with the goal to produce gasoline from natural gas in the Permian Basin,” said Ernie Miller, CEO of Verde. “This arrangement brings compounding economic and environmental benefits to West Texas. We believe that the ability to de-bottleneck midstream constraints along with the potential to reduce flaring of natural gas, while creating less carbon intensive gasoline, is of paramount interest to natural gas producers.”

“This agreement, with the first planned project in Martin County, fits perfectly with Diamondback’s strategy to decarbonize the oil field while ensuring a return for our investors,” said Kaes Van’t Hof, President of Diamondback. “Additionally, the scalability of the project is incredibly exciting, with similar natural gas-to-gasoline facilities possible across Diamondback’s locations in West Texas. We are proud to partner with Verde to bring this technology to the market.”

The proposed facility, which is to be located in Martin County, Texas in the heart of the Permian Basin, could serve as a template for additional natural gas-to-gasoline projects throughout the Permian Basin and other pipeline-constrained basins in the U.S., as well as address flared or stranded natural gas opportunities internationally.

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First Citizens finances acquisition of ammonia carrier

The financing supports Purus Clean Energy’s acquisition of the MV Green Power, a 40,000 cbm ammonia carrier.

The Maritime Finance group of First Citizens Bank has provided financing to Purus Clean Energy to support the acquisition of the MV Green Power, a 40,000 cbm ammonia carrier, according to a news release.

Purus Marine, the parent of Purus Clean Energy, provide slow-carbon maritime energy transportation and infrastructure systems. The company has a fleet of more than 50 low-carbon vessels in the offshore wind, LNG, ammonia, logistics and ferry sectors.

Maritime Finance, part of First Citizens’ CIT division, offers customized solutions for secured loans to a global client base of vessel owners and operators.

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Exclusive: CO2-to-X firm seeking platform and project capital

A CO2-to-X development company with proprietary CO2 utilization technology is seeking to raise capital from potential strategic partners that would utilize its product, which can decarbonize industrial emitters while producing hydrogen and carbon monoxide. For methanol production, the company says it can reduce the amount of natural gas required per ton of methanol to 27 MMBtu, compared to the typical 35 MMBtu, “a massive change in a commodity market,” a company executive said in an interview.

HYCO1, a founder-owned CO2-to-X development company with proprietary CO2 utilization technology, is seeking partners to invest at both the platform and project level as it advances a series of commercial proposals.

Based in Houston and owned by its three founders, the firm is developing and commercializing technology that utilizes waste CO2 and methane to produce high purity hydrogen and carbon monoxide, which can then be used to make low-carbon syngas, fuels, chemicals, and solid carbon products.

The founders went “all in” on the technology and funded the first $10m for development themselves, and have since raised an additional $10m from two different ethanol producers that are planning to use the product, called HYCO1 CUBE, at their ethanol plants.

“We’re in the process of raising between $20m – $30m this year, with one or more strategics in investment sizes of $10m or more,” HYCO1 co-founder and CFO Jeffrey Brimhall said in an interview.

Beyond that, Brimhall says the firm plans to close on project financing for various projects in development, “which will spin development capital, license fees, and revenue back to HYCO1.”

HYCO1 is having direct conversations for the platform capital with the investment teams from potential strategic partners – like further ethanol producers, or specialty chemical producers and other operators of steam methane reformers.

Using the technology, the company hopes to qualify for tax credit incentives under 45V for the hydrogen produced utilizing recycled CO2 as a feedstock, as reflected in comments made last week to the IRS.

Projects in development

Meanwhile, HYCO1 is advancing a first three projects to maturity: a $175m green carbon syngas project on the US Gulf Coast; a $400m green methanol project on the Gulf Coast; and a $1.2bn green carbon synthetics project at an existing ethanol plant in Lyons, Kansas.

For the Kansas ethanol project, HYCO1 is having conversations with the “top five banks,” Brimhall said, about a project finance deal. 

“We’re starting offtake discussions for both methanol and synthetics,” he said. “And as those offtake discussions firm up, we know for a fact that big intermediaries are going to want to come in and we’re likely going to work with those who have discretionary capital that they can invest on their own account and then pull in others with them.”

The company recently entered into a 20-year carbon dioxide supply agreement with Kansas Ethanol for the project. It will be co-located with Kansas Ethanol and utilize all 800 tons per day of CO2 emitted by the plant to produce approximately 60 million gallons per year of low-carbon and zero-carbon products.

HYCO1 is working to reach FID on the Kansas project by 1Q25, but its critical path depends on getting in the pipeline of an ISODEWAXING provider, such as Chevron or Johnson Matthey, said Kurt Dieker, another HYCO1 co-founder and its chief development officer.

“Assuming a conservative schedule, assuming they get engaged in the next 10 weeks, that would put us in 1Q of next year” for FID, said Dieker, who has deep experience in the ethanol industry, having worked for ICM, the technology behind 70% of the ethanol gallons produced in the US today.

The CUBE

HYCO1’s CUBE technology essentially works as a conversion catalyst applying heat to CO2 and methane to create hydrogen and carbon monoxide, the building blocks of virtually all petrochemical and carbon-based downstream products.

The company built a pilot facility in Houston two years ago, and has been characterizing the catalyst with 10,000 hours of uptime operation and data on how it works, Brimhall said.

As it was advancing the CUBE characterization process, the founders found they could shape the syngas ratio on the fly, moving it from 1-to-1 to above 3-to-1, he added.

“And because we’ve done the 1-to-1 all the way up to 3.5+-to-1, we also know we can produce pure CO by essentially taking the hydrogen off and using it as part of the endotherm that we need to make the reaction work,” he said. “So we could produce anywhere from pure CO to effectively pure hydrogen.”

That level of flexibility with a “single plant, single process, single catalyst” has never been done before, according to Brimhall, and it gives the company “immense capabilities to go into virtually any situation and solve for decarbonization and at the same time make high value products downstream.”

He added, “When we talk to people that really know the space and know industrial gases, they’re like, ‘Wait a minute, you can do that?’”

Methanol efficiencies

HYCO1 is currently in talks with six super major methanol producers about using the company’s technology for methanol supply, Brimhall said.

“Every one of them immediately went to diligence on our technology,” he said, noting that HYCO1 has promised to make natural gas-based methanol production more efficient, requiring only 27 MMBtu of natural gas per ton of methanol versus the typical 35 MMBtu of natural gas. 

“The difference between 35 MMBtu and 27 or 25 is a massive change in a commodity market,” Brimand said, “and whoever owns that technology is going to have a competitive advantage.

The methanol majors are evaluating how to use the technology to their benefit, which, according to Brimhall, might require them to make an investment in HYCO1 along with the first plant. 

“We’ve spent the last three or four months driving the technical diligence part with a team of 15 engineer PhDs to basically come back and say to them, ‘Here’s the proof, here’s the number.’”

HYCO1 plans to offer it concurrently to all of the methanol producers in order to extract the best terms on the first projects, he said.

Project developer or licensor?

HYCO1’s business model comes down to whether they are a project developer or a licensor of technology. According to Brimhall, they are a project developer first and a technology licensor second.

“We have to be project development oriented in our minds across multiple verticals in order to get traction and proof, viability, efficacy,” he said. “So we’re acting in a kind of a super-project developer mode to ultimately get the attention of big offtakers, strategic partners, and potential licensors downstream.”

However, a large licensor will not likely step in to provide a multi-project license until they see the product working at scale given the breakthrough nature of the technology, Brimhall said, and the economics that flow from it.

Take syngas for example, a market dominated by a few large players like Air Liquide, Air Products, and Linde. HYCO1 wants to position its first project in that sector and then start having licensing discussions with those big firms, or additional engineering firms like Technip, Fleur, or Bechtel.

The large firms could provide an initial “bolus” of capital to HYCO1 for having developed the technology “and getting a license that means something, whether it’s geographic or it’s exclusive worldwide or it’s bi-vertical,” Brimhall said.

“There’s an initial payment that commensurates with what the market opportunity is. And then there’s a minimum they’re going to have to step up to in order to keep us satisfied that they’re really a licensor that is going to ultimately realize value to the Topco or HYCO1 as a TechCo.”

“So it’s really project development first, licensing second kind of business model,” he added. “And it’s on multiple verticals. That’s what happens when you have, you know, potent technology.”

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exclusive

Avangrid touting green hydrogen opportunity in onshore renewables sale

Advisors selling up to 50% of the company’s US onshore renewables platform are pitching the value-enhancing potential of green hydrogen development in the process.

Avangrid is touting the opportunity to develop a major pipeline of green hydrogen projects as it prepares to collect initial bids for a stake in its US onshore renewables platform, according to two sources familiar with the matter.

The Portland, Oregon-based clean energy firm, which is owned by Spain-based Iberdrola, is running a process to sell up to a 50% stake in roughly 9.6 GW of operational projects and an 18 GW development pipeline, the sources said. The process launched in March with Lazard and Rothschild on the sellside.

As part of the platform’s opportunities for value enhancement, the company is promoting the potential for green hydrogen, with a sale teaser noting that parent Iberdrola is a global leader in green hydrogen development with two operational projects and 60 in development.

“[Avangrid] Onshore Renewables intends to leverage this experience to become an early leader in hydrogen project development in the US,” the teaser reads, stating a goal of building out some 900 MW of green hydrogen projects by 2035.

The company is also involved in seven “hydrogen hub” regions in the US: regions participating in the Department of Energy’s grant process for funding under the Bipartisan Infrastructure Act.

Avangrid last year signed an MoU with Sempra Infrastructure to develop large-scale green hydrogen and ammonia projects powered by renewable sources. The teaser notes that the company is advancing a flagship joint development project and initiating conversations with offtakers.

The operating renewables portfolio for sale includes 8.7 GW of wind power and some 300 MW of solar in Pennsylvania, Colorado, California, New York, Iowa, and North Carolina, along with the 536 MW Klamath cogeneration plant in Oregon. The development pipeline has roughly 14.2 GW of solar and solar-plus-storage capacity and 3.8 GW of wind.

Avangrid declined to comment. Rothschild and Lazard did not respond to requests for comment.

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exclusive

NanoScent seeking new investor to complete blended funding round

NanoScent is seeking a new investor to satisfy the contingencies of a combined EUR 8m investment from existing investors and the European Innovation Council.

NanoScent, an Israel-based technology firm, is seeking a new investor to help solidify an equity investment from the European Innovation Council, CEO Oren Gavriely said in an interview.

To satisfy the contingencies of a combined EUR 8m investment from existing investors and the EIC, NanoScent must bring on a new investor at EUR 2m, Gavriely said.

The ideal investor will have complementary capabilities that can ramp up the revenue stream, Gavriely added. Producers and suppliers of gasses and chemicals for industrial use would make sense.

The money will be used to further develop the proprietary VOCID Purity in-line sensor controller, which measures hydrogen quality by monitoring the cleanliness of gas lines. The technology is oriented towards producers and end-users like fuel cell stations, who will be responsible for the integrity of the hydrogen. The product will be rolled out at the end of 1Q23.

Gavriely said the company has several customers for the technology in the pipeline, declining to say who they are.

NanoScent, founded five years ago, has raised USD 10m in equity to date, with another USD 10m in non-dilutive funding. The company’s largest outside investor is Sumitomo Chemical, which trades on the Tokyo Stock Exchange.

Control of the company is maintained by the founders, Gavriely said.

NanoScent has 20 employees, Gavriely said. So far the company has relied on the expertise of its board, which includes one former investment banker, for financial advisory services. That could change in the future as the company grows.

NanoScent uses Pearl Cohen for law services and EY for accounting.

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