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Shell, Ohmium to develop green hydrogen energy projects

Shell India and Ohmium International to cooperate on green hydrogen applications, markets and project opportunities globally.

Shell India and Ohmium International have agreed to cooperate on green hydrogen applications, markets and project opportunities in India and globally, the two companies announced.

As part of the collaboration, both companies plan to launch joint working groups to assess opportunities from the technical, commercial, and safety perspectives.

The collaboration is positioned at further elevating Shell’s ambition to help build a global hydrogen economy by developing the most competitive opportunities in the production, storage, transport, and delivery of hydrogen to end customers.

“We have set an ambitious goal of becoming a net-zero emissions business by 2050 with a target to reduce absolute emissions by 50% by 2030,” said Nitin Prasad, chairman, Shell Group of companies in India. “Green hydrogen has a critical role in helping the world reach zero emissions. We plan to develop integrated hydrogen hubs to serve the industry and heavy-duty transport to be a leading player in this space.”

“We’re thrilled to collaborate with Shell to explore green hydrogen opportunities and solutions worldwide. Shell has demonstrated tremendous ambition to become a net zero carbon business by 2050– we believe that green hydrogen is a critical component of that transition,” said Arne Ballantine, CEO of Ohmium International. “We look forward to working with Shell to explore all the opportunities our electrolyzers enable.”

Ohmium International is a green hydrogen company that designs, manufactures, and deploys PEM Electrolyzers. Ohmium’s unique interlocking modular PEM electrolyzers provide a safer, modular, flexible, easy to install and maintain alternative to customized electrolyzers. Ohmium is headquartered in the United States, with manufacturing in India and operations worldwide.

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Deutsche Bahn and Fortescue developing ammonia-hydrogen engine

Deutsche Bahn and Fortescue Future Industries are working on modifying diesel engines for locomotives and traction vehicles for ammonia and hydrogen.

Deutsche Bahn and Fortescue Future Industries are working on modifying diesel engines for locomotives and traction vehicles so that they can be operated with ammonia and hydrogen, according to a press release.

Both sides have signed a corresponding Letter of Intent. In addition to the development of emission-free propulsion technologies, the agreement also provides for cooperation in logistics and supply chains for green fuels.

Deutche Bahn and Siemens Mobility recently developed a hydrogen system for rail through the EUR 13.74m (USD 14.47m) H2goesRail project, funded by Germany’s Federal Ministry for Digital Affairs and Transport (BMDV) as part of the country’s National Innovation Programme for Hydrogen and Fuel Cell Technology.

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NextEra leads Series B for hydrogen firm

Modern Hydrogen, previously known as Modern Electron, has completed an oversubscribed $32.8m Series B-2 funding round led by NextEra Energy.

Modern Hydrogen has completed an oversubscribed $32.8m Series B-2 funding round led by NextEra Energy, with strategic investors & partners Miura and National Grid Partners also participating, according to a news release.

Existing investors Gates Frontier, IRONGREY, Starlight Ventures, Valo Ventures and Metaplanet continued their participation and expanded their investments as part of the funding round.

Modern Hydrogen will leverage the investment to scale-up the capacity of its hydrogen production units. This will further accelerate decarbonization of gas networks and support distributed production of hydrogen, all without a reliance on new hydrogen pipelines or massive infrastructure upgrades. The capital will also be utilized to expand the company’s clean carbon material offerings and boost its global market presence via the partnership with Miura in Japan.

The company also announced the move away from its previous name, Modern Electron, to shape the new brand of Modern Hydrogen. This new identity reflects its commitment to innovation in the clean hydrogen economy. As Modern Hydrogen, the company will continue to provide the exceptional technology and products its customers have come to expect and will continue expanding offerings of clean energy and materials under the “Modern” umbrella.

The participation of NextEra Energy, Miura, and National Grid Partners in this funding round highlights their confidence in Modern Hydrogen’s vision and potential to clean up one of the largest sources of energy in human civilization today: Natural gas. These strategic investors bring a wealth of expertise in the energy, technology, and industrial equipment market, which will be invaluable as the company continues to scale and innovate.

“As a leading manufacturer of industrial boilers, our mission is to make it ‘actionable’ for our customers to decarbonize the heat. Among the various hydrogen production and transportation pathways, the clean hydrogen production at point of use from natural gas is unique, and bundled with our hydrogen-fired boiler, it will be a great solution to the customers who have limited access to clean hydrogen in the other pathways. Participating in the COP27 last year, I strongly felt the need for immediate climate action. Together with Modern Hydrogen, we will work toward hydrogen deployment as early as possible,” said Daisuke Miyauchi, president & CEO MIURA Co., Ltd.

“National Grid is mobilizing to help our customers reach net zero, and hydrogen plus renewable natural gas are key pillars of our strategy,” said Lisa Lambert, chief technology & innovation officer of National Grid and founder & president of National Grid Partners. “Modern’s technology could help our gas customers adopt clean hydrogen sooner by making low-CO2 hydrogen affordable onsite. Moreover, by pairing Modern’s pyrolysis technology with renewable natural gas in National Grid’s network, we have the potential to achieve negative emissions without the high cost of CO2 capture.”

“NextEra Energy Resources sees Modern Hydrogen’s potential to support the emerging hydrogen economy using technology that can provide clean hydrogen on-site, without liquefaction, transport or storage,” said Elena Bueno-Gonzalez, vice president, Clean Energy Solutions, NextEra Energy Resources. “In addition to our industry-leading wind, solar and battery energy storage portfolio, NextEra Energy Resources offers comprehensive decarbonization solutions, such as renewable natural gas and green mobility. NextEra Energy Resources believes that Modern Hydrogen will enable yet another exciting clean, cost-effective option for commercial and industrial customers.”

“There are 3 million miles of natural gas pipelines in the USA alone. And the delivered price of natural gas is much cheaper than that of delivered electricity, typically by a factor of 3 to 5 times,” explained Tony Pan, co-founder and CEO of Modern Hydrogen. “By stripping out the offending carbon atom from gas at the end of the pipe, before it has a chance to become CO2, Modern’s technology can deliver decarbonized gas – aka clean hydrogen – on location. Thus, Modern can deliver this hydrogen to the end consumer, without the decades and billions of dollars it would take to build out hydrogen infrastructure. Sidestepping the need for new pipes and transmission permits will be invaluable in achieving speed & scale in realizing the clean hydrogen economy.”

“Negative emissions technologies are required to meet humanity’s climate goals,” notes Modern Hydrogen Co-founder and CTO Max Mankin. “We can generate net negative emissions by applying our pyrolysis technology on carbon-neutral gases such as biogas. The solid carbon we pull out from the gas is directly weighed, so every ton of solid carbon we put into products and building materials are verifiable emissions captured, avoided, and utilized.”

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Cemvita appoints CFO

Houston-based Cemvita has appointed Lisa Bromiley as its new CFO.

Cemvita, a carbon utilization company, has appointed Lisa Bromiley as its Chief Financial Officer (CFO).

In her new role, Bromiley will spearhead capital markets, strategic positioning, and financial management of the company, bringing with her over two decades of invaluable experience in energy and commodity-related finance.

Prior to joining Cemvita, Bromiley played pivotal roles as CFO and Public Company Director. Particularly, she played a key role in the development of Flotek Industries, Inc. Mrs. Bromiley also steered Northern Oil and Gas, Inc., achieving a market capitalization of $4bn.

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Exclusive: Verde Clean Fuels seeking project finance for gas refineries

Publicly listed Verde Clean Fuels plans to seek equity and debt investors for low-carbon gasoline refineries it expects to deploy across the US. We spoke to CEO Ernest Miller about the strategy.

Verde Clean Fuels, a publicly listed developer of clean fuels technology and projects, is planning to seek project debt and equity investors to finance a series of low-carbon gasoline refineries it expects to deploy across the US.

Houston-based Verde, which employs syngas-to-gasoline refining technology, recently announced an agreement with Diamondback Energy to construct a facility in the Permian Basin that will utilize stranded natural gas to produce 3,000 barrels per day of gasoline.

The company is also pursuing a carbon-negative gasoline project on the premises of California Resources’ Net Zero Industrial Park in Bakersfield, California. The California project will produce approximately 500 barrels of RBOB renewable gasoline per day from agricultural waste, while capturing and sequestering around 125,000 tons of CO2 per year.

Verde is capitalized following a private investment in public equity (PIPE) injection of $54m as part of a reverse merger last year, allowing the company to take the Bakersfield and West Texas projects through the FEED phase, CEO Ernest Miller said in an interview.

Underpinning Verde’s business model is the view that gasoline will persist as a transportation fuel for many years to come, and that very few parties are working to decarbonize the gasoline supply chain.

“Between renewable diesel, renewable natural gas, and sustainable aviation fuel, there is very little awareness that renewable gasoline is even a thing,” Miller said. “The addressable market is enormous, and the impact that can be made by taking even a sliver of that market is enormous.”

Miller says that many market participants believe that electric vehicles will solve the emissions problem from road transport.

“The fact is that gasoline has a very, very long runway ahead of it,” he said. “Regardless of the assumptions you want to make about EV penetration, the volume of gasoline that we continue to use for the foreseeable future is huge.”

Verde Clean Fuels demo plant.

Verde’s projects are sized in the 500 – 3,000 barrels per day range, making them a unique player at the smaller end of the production range. The only other companies with similar methanol-to-gas technology are ExxonMobil and Danish-based Topsoe, which operate at a much larger scale, according to Miller.

Miller recognizes that low-carbon, or negative-carbon, gasoline operates within a complex ecosystem, with the California project potentially playing in that state’s LCFS and D3 RIN markets, in addition to the market for gasoline.

“What I would like to see us do is have an offtaker that plays in all three of those products – so if I can go to Shell Trading, or bp, or Vitol, and get one of them to say, ‘here’s a price,’ and they take all of that exposure and optionality,” Miller said, “that allows me to finance the project without having to manage a whole bunch of different commodity exposures and risk.”

Bakersfield 

The Bakersfield project, estimated to cost $235m to build, will utilize 450 tons per day of agricultural waste to produce gasoline, and sequester CO2 via California Resources’ carbon management company, Carbon TerraVault, a joint venture with Brookfield Renewable.

Because of the carbon sequestration, the project will qualify for incentives under 45Q, but since it is producing, in Miller’s words, “deeply carbon-negative gasoline,” most of the value for the project will come from California’s LCFS program.

In order to qualify for LCFS credits, the Bakersfield facility goes through the full GREET modeling process – including transport of feedstock, processing and refining, and transport away from the facility – returning a negative 125 grams equivalent per MJ carbon intensity score for the project, according to Miller.

As for investors, Verde “would like to see both California Resources and Brookfield Renewable in the project, either individually or through the Carbon TerraVault JV,” Miller said.

Verde is also in discussions with a handful of financial players, including infrastructure and pension funds that are looking for bond-like cash flow that a project finance model can provide. The company has also explored the municipal bond market in California, which would bring to bear a favorable capital structure for the project, Miller said.

Verde is not currently working with a project finance advisor, Miller said, noting that they have in-house project finance experience. In Texas, Verde is working with Vinson & Elkins as its law firm; and in California Verde is working with Orrick as counsel.

Gasoline runway

For the Diamondback facility in West Texas, which requires roughly $325m of capex, both Verde and Diamondback will take equity stakes in the project, and Verde will seek to bring in debt financing to fund the rest of the project costs in a non-recourse project finance deal, Miller said.

The Permian project seeks to provide a pathway to monetize stranded gas in the basin by taking advantage of and alleviating its lack of takeaway capacity, which causes gas prices at the Waha Hub in West Texas to trade at a significant discount to the Henry Hub price.

“Diamondback would take the position that any gas that’s getting consumed in the Permian Basin is gas that’s not getting flared in the Permian Basin,” Miller said, thus making the project a emissions-mitigating option. “There will never be enough natural gas takeaway capacity out of the Permian Basin,” he added, noting that driller profiles are only going to get gassier as time goes on.

Diamondback, for example, produces more in the Permian than it can take out via pipeline, therefore “finding a use, a different exposure, for that gas by turning it into gasoline, is of value for them,” Miller said.

“It’s the same dynamic in the Marcellus and Bakken and Uinta – all the pipeline-constrained basins,” he added, alluding to possible future expansion to those basins.

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exclusive

EverWind in capital raise for Nova Scotia wind-to-hydrogen complex

EverWind Fuels is soliciting investor bids for a $1bn initial phase of its Point Tupper renewables and hydrogen/ammonia production facility in Atlantic Canada.

EverWind Fuels, the Canada-based renewable fuels developer, is preparing to launch a process to raise an estimated $800m in debt for its Point Tupper ammonia production and export facility near Halifax, according to two sources familiar with the matter.

Citi and CIBC are mandated on the raise.

The company is seeking capital from a variety of investors, one of the sources said. The raise will likely conclude around the middle of the year with Citi stepping up for part of the debt quantum.

EverWind is also in talks with Canadian Infrastructure Bank, one of the sources said.

EverWind, Citi, CIBC and CIB did not respond to requests for comment.

Nova Scotia’s Minister of Environment and Climate Change recently approved the Point Tupper Green Hydrogen/Ammonia Project – Phase 1. Construction should begin this year on phase 1 of the project, consisting of a 300 MW electrolysis plant along with a 600 tonnes-per-day ammonia production facility. The project also involves construction of a liquid ammonia pipeline to a jetty for international shipping and a 230 kW substation that will bring in electricity.

Government support for the project is leading to offtake agreements needed to build out a hydrogen supply chain at scale, a third source said. The project is nearing a $200m offtake agreement for green hydrogen with a large global manufacturer, this source added.

The German groups E.ON and Uniper said in August that they aim to buy up to 500,000 tonnes per year of ammonia each from EverWind, starting in 2025, when the project is set to begin production.

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exclusive

London-based hydrogen fund expanding in US

A UK-based investor in early-stage hydrogen companies has completely allocated its first two funds and is looking to grow its presence in the US.

AP Ventures, the London-based venture capital and private equity firm, will need new advisory relationships and offices in the US as it looks for investors and deployment opportunities there, Managing Partner Andrew Hinkly said in an interview.

The company has fully allocated its first two funds with 12 LPs, Hinkly said.

Fund 1 ($85m) is fully deployed with two of the LPs. Two realizations have come from that fund to date: the sale of United Hydrogen Group in Tennessee to Plug Power and the sale of Hyatt Hydrogen to Fortescue Future Industries.

Fund 2 ($315m) is fully allocated with 12 LPs, including the two from Fund 1. The portfolio includes 21 companies across the hydrogen value chain (ammonia for transport, liquefaction, electrolyzer production, compressor technology, etc.) at the seed, Series A and Series B stages.

“We believe we have a very differentiated set of capabilities and experiences because we are singularly focused on the hydrogen value chain,” Hinkly said.

The firm’s LPs include AngloAmerican, Equinor, Implats, Mitsubishi, Nyso Climate Investments, Pavilion Capital, Plastic Omnium, Public Investment Corporation, Sparx, Sumitomo, and Yara International.

Strategic advice need apply

In the near-term AP Ventures can offer deal flow, opportunities within portfolio companies for various professional services, and an understanding of the progression of hydrogen businesses for later-stage investors, Hinkly said.

Transactions to date have been conducted bilaterally with external legal counsel, Hinkly said. AP Ventures has yet to engage a financial advisor for that purpose.

“If you want to know about hydrogen and hydrogen deal flow, AP Ventures sees most of it,” Hinkley said. “We bring with us an ecosystem of fairly regular co-investors who are similarly interested in hydrogen.”

Co-investors include Amazon, Mitsuibishi, Chevron and Aramco.

Some of the firm’s more mature companies will take on strategic consulting services as they prepare for larger fundraising, Hinkly said.

“Clearly there are a series of advisory services that our portfolio companies require as they raise capital or subsequently look to acquire or be acquired,” he added.

Later-stage investors are keen to understand the development of AP’s portfolio, Hinkly said. Topco equity and larger-scale infrastructure investors have collaborative relationships with the firm as they prepare to acquire its portfolio companies in the future.

“We have a common interest in the continued development and maturity of the companies we’re investing in,” Hinkly said. “We have an ever-increasing roster of later-stage private equity investors who have a desire to maintain a dialog with us and to be introduced to our portfolio companies on a regular basis.”

New world opportunities

US portfolio companies could be in greater need of strategic advisory services in the near term than some of AP’s European holdings, Hinkly said.

The firm is looking to establish offices in the US with an eye on Denver and Houston, Hinkly said.

Greater support for hydrogen in the US under the IRA means European companies within AP Ventures’ portfolio are also looking to establish themselves in the US.

In terms of a target market, AP Ventures is particularly interested in Texas, which Hinkly said he expects will be the hydrogen capital of the world. Existing infrastructure, human capital and enormous wind and solar resources pair well with a willingness to build out the industry there, he said.

AP will continue investing in the full hydrogen value chain as it has been for years, identifying weak spots in the chain to strengthen the industry, Hinkly said. But moving forward, the firm would like to invest in carbon capture utilization and storage as well.

Scaling up with the industry

As the hydrogen industry grows and its portfolio companies scale, there is significant opportunity for AP Ventures to grow and provide more financing, Hinkly said.

“There is a huge requirement for capital and we are knowledgeable, very knowledgeable, of where good opportunities exist,” he said.

The nature of the firm’s early contracts gives them preferential access to those opportunities in some cases as well. Whether that would be best done directly with a new fund or partnership with a firm with complementary skills is an open question.

“That strategic question is one that’s frankly ahead of us this year.”

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