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Talos Energy divests carbon management business

Talos Energy has sold its carbon management business to TotalEnergies for $148m.

Talos Energy Inc. has entered into an agreement for the sale of its wholly owned subsidiary, Talos Low Carbon Solutions LLC, to TotalEnergies E&P USA, Inc. for a purchase price of $125m plus customary reimbursements, adjustments and retention of cash, combined totaling approximately $148m, according to a news release.

The transaction was based on an effective date of January 1, 2024. Talos intends to use the proceeds from the sale to immediately repay borrowings under its credit facility and for general corporate purposes.

The sale includes Talos’s entire carbon capture and sequestration business, including its three projects along the U.S. Gulf Coast: Bayou Bend CCS LLC, Harvest Bend CCS LLC and Coastal Bend CCS LLC.

Talos may realize additional future cash payments upon achievement of certain milestones at the Harvest Bend or Coastal Bend projects or upon a subsequent sale of these projects by TotalEnergies. Robin Fielder, Talos Executive Vice President, Low Carbon Strategy and Chief Sustainability Officer, will continue to serve in her role for a transition period before leaving Talos to pursue other opportunities.

Talos President and Chief Executive Officer Timothy S. Duncan stated: “Since TLCS’s inception, we have successfully applied our energy expertise as an early mover aimed at developing decarbonization solutions along the U.S. Gulf Coast. Strong market interest during our capital raise provided the strategic option to fully monetize the business to TotalEnergies, an established global leader in CCS development. Robin and our entire CCS team did an outstanding job crystallizing value for Talos shareholders for a strong financial return. The transaction will further enable Talos to prioritize cash flow generation and optimal capital allocation in our core Upstream business. We are also continuing to explore business development and strategic M&A opportunities.”

Morgan Stanley & Co. LLC served as financial advisor to Talos and Latham & Watkins LLP served as legal advisor to Talos.

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SOEC electrolyzer maker Sunfire attracts EUR 500m

German electrolyzer maker Sunfire added new equity investors including GIC and secured a loan from the European Investment Bank.

The German electrolyzer manufacturer Sunfire has raised EUR 215 million in a Series E equity financing round, further complemented by a term loan of up to EUR 100 million provided by the European Investment Bank (EIB).

In addition, Sunfire has access to approx. EUR 200 million from previously approved, undrawn grant funding to support its growth, according to a news release. This makes Sunfire one of the best capitalized electrolyzer manufacturers in the industry.

Sunfire announces the successful completion of a substantial Series E financing round, raising EUR 215 million in equity capital. The new investment will further boost the company’s critical role in ramping up the hydrogen economy. Sunfire welcomes LGT Private Banking, GIC, Ahren Innovation Capital, and Carbon Equity as new investors. The transaction is subject to customary regulatory approvals and is expected to close in Q2 2024.

Sunfire-CEO Nils Aldag said, “This substantial financing round is good news for Europe’s leading role in hydrogen production and for the European clean-tech industry. I am delighted to welcome additional investors backing our vision, product offering, and capabilities to deliver industrial electrolyzers at pace and scale. With this new capital, we are uniquely positioned to further accelerate our company’s growth and industrialization plans to meet the fast-growing demand for electrolysis technologies.”

In addition to the new investors, existing shareholders have increased their investment in Sunfire – among them Lightrock, Planet First Partners, Carbon Direct Capital, the Amazon Climate Pledge Fund, and Blue Earth Capital.

In line with Sunfire’s commitment to financial diversification, the company has also secured a credit of up to EUR 100 million from the European Investment Bank (EIB), which provides increased capacity to boost its development and industrialization of solid oxide electrolyzers.

Sunfire’s pressurized alkaline and high-temperature solid oxide electrolysis technologies are a key enabler of the transition to renewable energy, offering a scalable and efficient means of producing green hydrogen. The company targets installing several gigawatts of electrolysis equipment by 2030 in large-scale green hydrogen projects, securing a leading position in the fast-growing global electrolyzer market.

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Hydra Energy breaks ground on hydrogen refueling station

Vancouver-based Hydra Energy has broken ground on what it calls the world’s largest hydrogen refueling station in Prince George, British Columbia.

Vancouver-based Hydra Energy has broken ground on what it calls the world’s largest hydrogen refueling station in Prince George, British Columbia.

The groundbreaking marks the first project in the company’s Western Canadian Hydrogen Corridor servicing B.C.- and Alberta-based heavy-duty trucks that have been converted to run on both hydrogen and diesel using Hydra’s zero-cost, co-combustion conversion kits. This includes Hydra’s first paying fleet customer, Prince George-based Dymin Mechanical, whose fleet will represent 12 of the 65 trucks the new station will support.

“What’s so important about designing and building our own hydrogen refueling station is that it solidifies a template of how to overcome the chicken and egg problem that has plagued the hydrogen sector. This Prince George station demonstrates that hydrogen can be provided at diesel parity without up-front capital costs for fleets,” stated Hydra Energy Service Delivery Lead, Ilya Radetski.

The new station and hydrogen production will be located on five acres, will produce 3,250 kilograms of hydrogen a day, and can refuel as quickly as diesel and up to 24 Hydra-converted trucks each hour across four bays. The station’s low-carbon hydrogen is being produced from two on-site, 5 MW electrolysers with electricity coming from BC Hydro, B.C.’s main electricity utility with 31 hydroelectric facilities throughout the province.

Additional critical partners include energy project delivery expert, Solaris, and industrial construction specialist, PCL Construction, with project financing support coming from Hydra’s seed funders and non-dilutive government funding including the BC Ministry of Energy, Mines and Low Carbon Innovation – Part 3 Agreement.

Hydra’s Prince George station will be operational early 2024. In the meantime, the company is also partnering with the Edmonton International Airport (EIA) to build a similar project on EIA land. This will service Hydra-converted trucks in the Edmonton region (like Hydra’s second fleet customer, VEXSL) marking the Eastern-most endpoint of Hydra’s Western Canadian Hydrogen Corridor on Highway 16. Additionally, another station is being explored along the same highway in Port Edward/Prince Rupert located west of Prince George. Hydra is currently raising the balance of funding needed for the projects and will announce new investors once confirmed.

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Raven SR: “We haven’t had a problem finding offtakers”

Waste-to-hydrogen firm Raven SR has offtakers knocking on its door.

An official from waste-to-hydrogen firm Raven SR has a counter for the hydrogen offtake naysayers out there.

“We haven’t had a problem finding offtakers,” JuliAnne Thomas, director of external affairs at the company, said yesterday.

“We’ve got people coming to us on a regular basis looking for hydrogen, whether it be a city bus transport, somebody like Hyzon, the Chevrons, the Shells of the world,” she said in remarks at the Reuters Energy Transition conference in Houston. “People are looking for this molecule.”

The firm has three projects in California, one of which, the Richmond project, is nearly permitted. It was undergoing a Series C capital raise last year with advisory support from BofA Securities and Barclays. In February it took a strategic investment from Stellar J Corporation.

Raven SR is looking for partners with skin in the game, Thomas said. “We want the offtaker, we want the waste company that wants to come in on a partnership,” she added. “We’re helping the landfills use up the methane that would otherwise be flared.”

‘Complicated puzzle’

On the same panel, David Galey of Orsted outlined some of the Danish multinational’s Power to X plans on the Gulf Coast.

The company is developing Project Star, which will use onshore wind and solar PV to produce 300,000 tonnes of e-methanol annually under a partnership with Maersk. It is also looking at ammonia on the Gulf Coast, for a different offtaker in the chemical feedplant business, Galey said.

“Methanol production is a very complex, integrated process where you’re not just relying on renewable electricity to create hydrogen, you also have the biogenic CO2 side of things,” he said.

“So the partnerships that you need in order to support methanol production […] each have their own challenges,” he said, noting considerations for large sources of biogenic CO2, cheap renewable power, and proximity to offtakers.

“It’s a complicated puzzle of how you try to find the best balance between those different constraints that you have,” he said.

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Canadian renewables major eyeing hydrogen production at pumped hydro facility

Canadian power generation giant TransAlta could co-locate hydrogen production with select wind and hydroelectric facilities.

TransAlta, the Canadian power generator and wholesale marketing company, is contemplating a buildout of hydrogen production capabilities at its 320 MW Tent Mountain pumped hydro storage project in Alberta, Executive Vice President of Alberta Business Blain van Melle said in an interview.

“Our view on hydrogen is that it’s a technology that’s an option, somewhat further out in the future, particularly when it comes to power generation,” van Melle said. “If we can offer our customers maybe a power and hydrogen solution, and they’re using the hydrogen in another process, that would be something we would look at.”

In early 2022 TransAlta made a CAD 2m equity investment in Ekona Power, a methane pyrolysis company based in Vancouver. The company also committed USD $25m over four years to EIP’s Deep Decarbonization Frontier Fund 1.

That latter investment is a way to continue to learn about hydrogen and have exposure to emerging technologies, van Melle said.

The recent 50% stake acquisition in the Tent Mountain project includes the intellectual property associated with a 100 MW offsite green hydrogen electrolyzer and a 100 MW offsite wind development project.

Having hydrogen production co-located with wind and pumped hydro storage could make sense for the company in a few years, van Melle said. FID on Tent Mountain could be reached sometime in 2025 and will require the company to secure a PPA offtake and determine capital cost. Development work will take three to four years and earliest construction could begin in 2026.

The company has not had discussions with potential offtakers, van Melle said, adding that development on the pumped hydro facility needs to mature before a hydrogen component advances.

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NOx mitigation firm looking to scale

A publicly listed company with a hydrogen burner project backed by one of the largest US utilities could accelerate growth with a capital infusion in pursuit of first-adopter clients. It offers technology that aims to mitigate an underappreciated aspect of the embryonic clean hydrogen ecosystem: blending hydrogen with natural gas can greatly increase NOx emissions when combusted.

ClearSign Technologies, the publicly listed burner solutions provider, is at an inflection point in the development of its products to serve players in the emerging hydrogen landscape, CEO Jim Deller said in an interview.

“We’re new,” Deller said of the company’s emergence on the hydrogen scene. The company is aggressively seeking a place in the hydrogen mainstream as it pursues first-adopter clients. “We need to get our install base up.”

ClearSign recently received a collaboration commitment and pledged funding for its 100% Hydrogen Ultra Low NOx burner project from Southern California Gas Co. This comes on top of the SBIR program Phase 2 Award for $1.6m from the DOE. The company has one year’s cash on hand, according to Deller.

Hydrogen blending increases the output of NOx emissions, which are heavily regulated, Deller explained. A 20% hydrogen blend with fuel gas, for example, causes a 40% increase in NOx emissions.

The goal of the project with SoCalGas is to develop NOx hydrogen burner technology, which the company believes will enable the adoption of hydrogen fuel for industrial heating.

“Your NOx permit is not going to change,” he said. “In order to use even a small amount of hydrogen in your fuel gas, you need a technology that’s going to allow you to maintain NOx emissions for an efficient price.”

Deller said he sees ClearSign as an enabler of the hydrogen transition, pointing to SoCalGas’ need to keep their clients compliant with their operating permits.

“They’re going to have to modify their technology to enable the combustion of hydrogen without exceeding their NOx permits, and that’s where we come in.”

A ‘pivotal point’

ClearSign is open to discussing partnerships and financial options to scale deployment of its technology, Deller said, pointing to potential markets in Texas and the Pacific Northwest.

“We’re certainly open to any company that has a compatible technology,” Deller said.

ClearSign is not engaged for M&A now, but it does have discussions with prospective financial advisors, company spokesperson Matthew Selinger said. “Like any small company, if we had more money we could potentially accelerate faster.”

The company is not considering a spin off now, Deller said, focusing instead on getting traction commercially. ClearSign has not historically taken on debt. Those types of business opportunities are not off the table, but technical synergy and strategic partnerships are first pursued for value creation.

“We’re at a pivotal point, I believe, in the development of our technology,” Deller said. “I’m open to talk about any ideas.”

A technology in development

The burner technology is also applicable to systems that use only hydrogen, Deller said. The Phase 2 DOE grant funding is meant to develop a full range of commercial burners that will operate through a range of fuel gasses up to and including 100% hydrogen.

ClearSign does not have additional partnerships pending announcement, Deller said. But what’s applicable in Southern California is relevant to discussions happening in proposed hydrogen hubs around the country.

The company is headquartered in Tulsa, Oklahoma, along with process burner manufacturing partner Zeeco. It uses third-party manufacturing and will continue to do so, Deller said.

ClearSign also has offices in Seattle and Beijing. The company’s US and Chinese businesses to not have a materials shipping relationship, Deller said. The model followed has manufacturing separated between countries.

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Exclusive: Emissions reduction technology firm in Series A capital raise

A technology start-up that uses plasma to reduce emissions from natural gas and methane flaring is seeking an additional $15m to top off its Series A capital raise. One of its principal products converts natural gas into hydrogen and usable graphene with no CO2 emissions.

Rimere, a climate solutions company with proprietary plasma technology, is seeking to raise an additional $15m as part of its ongoing Series A capital raise.

The start-up recently announced an anchor investment of $10m from Clean Energy Fuels Corp, a publicly listed renewable natural gas firm, and is pursuing further investments from strategics and financial players, with an eye on closing the round in 2Q24, CEO Mitchell Pratt said in an interview.

The company is not currently working with a financial advisor on the Series A capital raise, Pratt said. Its legal counsel is Morrison Foerster.

The anchor investment along with additional funds raised will allow Rimere to advance development and field testing of its two principal products, the Reformer and the Mitigator. 

The Mitigator is a plasma thermal oxidizer that reduces the greenhouse gas potency of small-scale fugitive methane emissions, while the Reformer transforms natural gas into clean hydrogen and usable graphene without creating any CO2 emissions.

The products are meant to work in tandem to decarbonize natural gas infrastructure and deliver cleaner gas to end users in transportation, power generation, and industry.

“We believe that, overall, what the technology does is revalue natural gas reserves and the long-term viability of natural gas for global future energy,” Pratt said.

Commercial strategy

Rimere will develop a commercial strategy throughout the course of this year for the Mitigator, and plans to deploy the product in the beginning of next year.

“We have quite a bit of interest for this as a solution because of the low cost of the product and the terrific results,” Pratt said, noting that the Mitigator removes CO2 for under $5 per metric ton.

In contrast, the Inflation Reduction Act passed in 2022 introduced the Methane Emissions Reduction Program, a charge on methane emitted by oil and gas companies that report emissions under the Clean Air Act. The charge starts at $900 per metric ton of methane for calendar year 2024, increasing to $1,500 for 2026 and beyond.

To be sure, the Mitigator, as a thermal oxidizer, transforms methane, which is a much more potent greenhouse gas, into hydrogen, water, and CO2 for a net reduction of the global warming impact of 200 metric tons a year of CO2.

The Reformer, a container-style unit, is being scaled up to produce 50 kg per day of hydrogen from natural gas along with 150 kg of graphene, a marketable nano carbon where the CO2 is captured. Graphene is used in batteries, composites, medical devices, and concrete to reduce greenhouse gas emissions, among other applications.

Rimere plans to increase the scale of the Reformer to between 400 – 600 kg per day and raise additional funds next year, Pratt said. The amount of funds needed for that is not yet known, he said.

Pratt envisions an application for hydrogen blending using the two products.

“We see it as a way to decentralize hydrogen production, taking advantage of a cleaner natural gas infrastructure, because we’ve applied the Mitigator to cleaning up those fugitive methane emissions that are occurring in the normal operations of equipment,” Pratt said.

For example, Rimere can tap into a natural gas pipeline, take a slipstream of gas, extract the valuable graphene, and then re-inject hydrogen and natural gas back into the pipeline.

Additionally, the blending application can be positioned at an end-use customer’s facility, allowing the Reformer to start blending hydrogen into the gas stream, going into boilers and burners and reducing the CO2 emissions more effectively and immediately, Pratt said.

$1 per kg

Taking the average cost of delivered natural gas and power to industrial users, the company can already produce hydrogen at $1 per kilogram, Pratt said.

For every four kilograms of end-use product – one being hydrogen, the other three graphene – the energy cost allows hydrogen to be produced at or below $1 per kg.

“The last 12 months of running is less than a dollar,” he said, emphasizing that the graphene production is not subsidizing the hydrogen.

“Although the value of graphene could make hydrogen a throwaway fuel.”

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