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Texas LNG signs HOA for natural gas liquefaction

The Brownsville project, touted as one of the lowest emitting LNG export facilities in the world, has signed a heads of agreement for liquefaction services with EQT Corp.

Texas LNG Brownsville has signed a Heads of Agreement with EQT Corporation for natural gas liquefaction services, according to a news release.

The HOA anticipates the finalization of a definitive 15-year LNG tolling agreement for 0.5 MTPA of LNG from the first train of Texas LNG, a four million tonnes per annum liquefied natural gas export terminal to be constructed in the Port of Brownsville, Texas.

Glenfarne, a developer, owner, and operator of energy transition infrastructure, is the majority owner and managing member of Texas LNG. Texas LNG will achieve financial close and begin construction in 2024 commencing commercial operations in late 2027 or early 2028. Glenfarne is also the sole owner and developer of the 8.8 MTPA Magnolia LNG in Lake Charles, Louisiana.

Texas LNG is slated to become one of the “lowest emitting” LNG export facilities, according to the company, as it will use renewables to power compression.

“We are proud to welcome EQT as a customer and partner for Texas LNG, with our industry-leading low-emissions facility liquefying US natural gas for global markets,” said Brendan Duval, Glenfarne CEO and Founder. “This is an important milestone for Texas LNG, with additional agreements to be announced in the near-term as we progress towards a Final Investment Decision.”

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Amogy increases Series B round to $150m

Amogy has added $11m to its Series B fundraising round with four additional investors.

Amogy Inc., an ammonia-to-power technology startup, today announced its $11m Series B-2 fundraising, joined by Marunouchi Climate Tech Growth Fund, Mitsubishi Corporation, Mitsubishi Heavy Industries America and Synergy Marine.

This funding concludes Amogy’s Series B fundraising.

In March, Amogy announced its Series B-1 round of $139 million led by SK Innovation. The Series B-2 round further propels Amogy’s momentum to support commercialization, begin manufacturing of its innovative ammonia-to-power technology, and bring its first product to market in 2024.

Amogy CEO Seonghoon Woo said in a recent interview that the company would likely launch a Series C fundraising round targeting between $400m – $500m late next year.

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LSB Industries pushing blue over green

LSB executives said they have paused a green ammonia project due to expected capital costs and a lack of clarity on tax credit incentives. But they detailed plans for a blue ammonia facility, including spending some $150m of cash over three years to fund their equity portion of the project, which was recently proposed for the Houston Ship Channel.

US ammonia producer LSB Industries sees market forces working in favor of blue ammonia projects versus green ammonia, and is prioritizing its blue projects while pausing a green ammonia facility planned for Pryor, Oklahoma.

Executives yesterday pointed to lower natural gas prices and an uptick in power prices along with missing guidance from the US Treasury for green molecules as the reason for pausing the green ammonia project.

Oklahoma-based LSB will use a project financing structure to fund its proposed blue ammonia plant in the Houston Ship Channel and likely find initial offtakers among Japanese and Korean power companies, CEO Mark Behrman said.

The facility, which would produce approximately 1.1 million metric tons of ammonia and capture and sequester 1.6 million metric tons of CO2 annually, is currently in the pre-FEED phase and planned for construction on the Vopak Moda Houston Ship Shuttle Ammonia Terminal.

“We selected the supplier of the technology license basic, engineering design, proprietary equipment, and catalyst, and we are in negotiations to finalize the related agreements,” Behrman said in prepared remarks. “In addition to engineering and design activities, we are working to secure offtake customers for the anticipated ammonia production. We expect initial offtakers to be Japanese and South Korean power companies.”

LSB is developing the facility in partnership with INPEX, Japan’s largest E&P company, and plans to build and operate an ammonia synthesis loop using low-carbon hydrogen produced by Air Liquide, who will also handle the carbon capture and sequestration as well as the nitrogen supply.

Based on LSB’s feasibility study, the cost of the project would come in between $500m and $750m, Behrman said, which could conservatively be financed with 60% debt, and, when taking the $750m figure, would amount to $450m of debt and $300m of equity to fund the facility.

“And for simplicity purposes, we haven’t worked out the ownership structure quite yet,” Behrman said, “but assuming that LSB and INPEX [have] 50/50 ownership of the loop that would be $150m of cash from LSB over a three-year period.”

The pre-FEED phase will last until 2Q24 followed by a one-year FEED period that would finish in 2Q25, he said.

“Within the time of us executing on a FEED study, we would expect that we would have negotiated take-or-pay contracts with the federal government, Japanese and Korean and potentially European and U.S. off-takers for the ammonia that we would produce,” Behrman said. “At the end of FEED, we would have to make a decision on whether we’re moving forward, so FID, and we would not move forward without take-or-pay contracts.”

Green ammonia pause

Meanwhile LSB has paused its green ammonia project, “given the uncertainty around the 45 tax credits, combined with the project’s current capital costs,” Behrman said.

He added: “We remain excited about this project and our opportunity to be an early entrant into the production of green ammonia and we continue to have discussions with potential offtakers for green ammonia supply, but we need clarity and finalization of the 45V tax credits before we can make a decision to move forward.”

Natural gas prices have decreased in the US while electricity prices have increased, working in favor of natural gas products.

“That then is a considerable headwind for the build-out of industry based on sourcing power from the grid, which includes green ammonia production,” he said.

“This development is also why we believe the path to blue ammonia is much easier than the path of green ammonia today, especially considering the lack of a green premium favoring production economics,” the executive said. “Therefore, our current focus is on making sure we execute effectively on our El Dorado blue ammonia project and our Houston Ship Channel blue ammonia project as they both set us up well for the future.”

At El Dorado, LSB is in discussions with the EPA for a Class V carbon capture and sequestration permit, and expects to commence production at the plant in 2H25.

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PCC Hydrogen to build ethanol-to-hydrogen pilot

The Indiana plant will convert ethanol into high purity, negative carbon index green hydrogen using a patented reforming process coupled with carbon capture.

PCC Hydrogen Inc, a low carbon/negative carbon hydrogen production company based in Louisville, KY, is pleased to announce plans to construct a pilot hydrogen production plant in Cloverdale, IN, according to a news release.

PCC H2’s plant will showcase the efficient conversion of logistically friendly ethanol into high purity, negative carbon index green hydrogen using a patented reforming process coupled with the capture of the processes pure CO2 byproduct. By providing a readily available, negative carbon index hydrogen close to the point of need, the Company is enabling the decarbonization of the economy in a cost effective and commercially viable way.

The Company has engaged Plant Process Group (PPG), a leading Houston based design, engineering, fabrication, construction, and commissioning services company to support the project with plans to have the pilot plant operational by first quarter 2024. PPG has decades of experience designing and building facilities for the refining industry, chemicals manufacturers, and biofuels producers.

PCC H2 is also working closely with the Town of Cloverdale and Putnam County to support the establishment of the first negative carbon index hydrogen production facility of its kind in the world. The production facility expects to hire local personnel at competitive wages and benefits.

Tim Fogarty, PCC H2 CEO, stated “We are excited to work with the Town of Cloverdale and Putnam County to showcase our groundbreaking technology. The Cloverdale location is ideal for the construction and operation of our first production facility given existing local hydrogen demand and the potential for broad adoption of low cost, negative carbon index hydrogen to help decarbonize the local economy in a financially rational way.”

Hydrogen generated from the PCC H2 process can be used in myriad applications ranging from hydrogen combustion engines to fuel cells (fuel cell powered loaders, trucks, other rolling stock, and for fuel cells in non-grid connected BEV charging stations). Furthermore, PCC H2 is exploring the use of its hydrogen to lower the emissions profile of any heating/calcining process. Finally, the Company is leveraging the logistically friendly nature of ethanol to produce hydrogen at smaller, distributed facilities closer to the point of use, diminishing the adverse added expense of transporting liquid hydrogen over long distances.

Cloverdale Town Manager, Jason Hartman, added “Cloverdale is extremely pleased to support the construction of the first of its kind negative carbon index hydrogen production plant that will decarbonize local industry while offering competitively priced jobs to the local community.”

The PCC H2 core reformer at the pilot plant will be mounted on three skids and operate 24/7. The company expects to break ground at the site this Summer.

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Developer Profile: Green hydrogen developer finds strength in numbers

Clean Energy Holdings is assembling a coalition of specialized companies as it seeks to break into the novel green hydrogen market.

Nicholas Bair draws a direct line from his childhood on an Oregon dairy farm to the coalition of specialized companies that, as the CEO of Clean Energy Holdings, he is now assembling in pursuit of key-player status in the green hydrogen industry.

“We created our own milk from our own hay,” he says, of his family’s organic dairy farm in Klamath Falls, near the California border. He adds, using an expression he often repeats: “Everything was inside the battery limits.”

This phrase – “inside the battery limits” – represents what Bair, who is forty-one and a chemist by trade, is trying to achieve with The Alliance: a broad, self-contained battery of partners with specialized competencies working in coordination on the challenges of developing and operating groundbreaking green hydrogen projects.

“We’re doing everything from soup to nuts,” he says.

CEH and The Alliance are planning to build roughly $1bn worth of projects per year over the next ten years, Bair says. As a launching point, the parties are advancing a green hydrogen facility – called Clear Fork – near Sylvester, Texas that would churn out 30,000 kg per day in phase 1 starting in 4Q24. The hydrogen would be produced using electrolyzers powered by a 325 MW solar farm, while ancillary facilities at the site would be powered by a gas turbine capable of blending up to 70% hydrogen.

As members of The Alliance, Equix Inc. is acting as the EPC for the solar and gas turbine portion of the project, while Chart Industries is providing tankers, trailers, and liquefaction to transport hydrogen from the site in northwest Texas. Meanwhile, Hartford Steam Boiler – an original contributor to standards written by the American Society of Mechanical Engineers – will provide quality assurance and control; Coast 2 Coast Logistics is responsible for trucking; and The Eastman Group provides permitting and facilities management.

‘First-of-kind’

Although a renewable project, the green hydrogen concept is similar to most refinery EPC contracts, since many of them are first-of-kind with significant liquidated damages, Bair says. Additionally, the green hydrogen projects are “married to renewables, and you need the cryogenics and the distribution in between.”

Before starting Clean Energy Holdings, Bair was the founder and CEO of Bair Energy, a program and construction manager for infrastructure and energy projects – a service that Bair Energy is providing as a member of the Alliance. A period of low natural gas prices made Bair Energy’s specialty – geothermal power – less competitive, and Bair, seeking to develop his own projects instead of managing projects for others, sought to branch out into new types of energies.

Bair Energy itself consists of professionals that have been cherry-picked from the industry, Bair says. Candice McGuire, a veteran of Shell and Technip, is Bair’s chairman; chief operations officer John Strawn recently joined from Technip; and wind-industry veteran Peder Hansen has joined as VP and chief engineering manager.

“Our experience on the team is taking first-of-kind, developing it, and getting it to market,” he says. With The Alliance, “We went out and found the best at what they do, put them on lump-sum order, and brought them to the table early to figure out how to make their product talk to the other person’s product, so we can have a guarantee,” he says.

What distinguishes Clean Energy Holdings from other green hydrogen developers is, in fact, the coalition it is building, says Elizabeth Sluder, a partner at Norton Rose Fulbright who is CEH’s legal advisor.

“It’s intended to be one-stop shopping in a vertically integrated structure such that as and when needed for future CEH projects or third party projects that are identified, you have all the various players you need to take it from point A to point B,” she adds.

Because the parties are on standby with a common goal, CEH and its partners can provide lump-sum turnkey services, with some element of bulk pricing potentially factored in, because savings are generated through not having to issue RFPs for partners in future projects.

“The savings in time and money is, I would expect, very valuable,” Sluder says. “And when you apply those principles to long-term strategy and equity investment-type opportunities, the lower capex spend should theoretically benefit the project at large.”

Keeping the pieces moving

Bair runs CEH alongside Co-Founder and President Cornelius Fitzgerald. The two met as children – Fitzgerald was raised on a nearby cattle farm in southern Oregon – and enjoy the uncommon chemistry of childhood friends.

In something of classic pairing, “I’m much more the trumpet, paving the path,” Bair says, while Fitzgerald “usually keeps the pieces moving.”

“Sometimes Cornelius has had the best cup of coffee and takes the lead in meetings. And sometimes I do,” he says. “It’s that ability to rely on each other that set the basis of design in my mind for what a good partner looks like.”

Fitzgerald says they approach the challenge of breaking new ground in green hydrogen with “quiet confidence and humility.” By having a big picture vision as well as “credible and tangible fundamentals for the project” – like land, resource, and water control – the project moved from an idea to a reality, he adds.

“And really we’ve been driving at how to get the best experience and expertise at the table as early as possible,” Fitzgerald says.

Equix, Inc, a civil engineering firm, joined the grouping to build the solar and gas generation portion of the facility, representing the company’s first-ever foray into a hydrogen project, says Tim LeVrier, a vice president of business development at the firm.

“There are many challenges integrating all these types of power sources and energy into creating hydrogen,” Levrier says. “From an electrical engineering standpoint it is extremely challenging to coordinate power switching from one source to another. Another consideration we are having to work through is what to do in regards to producing hydrogen at night. Will there be a battery portion to the project or do we just not produce hydrogen when it is dark? These are all things we are considering and will have to find creative solutions for.”

‘Pathological believer’

CEH recently added Chart Industries to The Alliance, which in addition to furnishing liquefaction, tanks and trailers to move hydrogen, will provide fin fans for cooling and a reverse osmosis system for cleaning water. “We don’t want to give away all our secrets,” Bair says, “but it’s a very efficient process.”

The unique perspective and expertise of partners in The Alliance makes for a fulsome ecosystem around any CEH project, says Jill Evanko, CEO of Chart Industries. With respect to CEH’s projects, Evanko says they are “very targeted, which, with focus, will continue to help evolve the hydrogen economy.”

“Chart’s hydrogen liquefaction process as well as associated hydrogen equipment including storage tanks and trailers” – which the company has been manufacturing for over 57 years – “will be sole-source provided into the project. This will allow for efficient engineering and manufacturing to the CEH Clear Fork project schedule,” she says.

In any molecule value chain, hydrogen included, Chart serves customers that are the producers of the molecule, those who store and transport it as well as those who are the end users, Evanko adds. “This allows us to connect those who are selling the molecule with those who need it.”

Looking ahead, CEH is preparing to meet with investors in the lead-up to an April, 2023 final investment decision deadline for the Texas project. And it is being advised by RockeTruck for another RFP seeking fuel cell vehicles to transport hydrogen from the site as the trucks become available – a design that will likely include hydrogen fueling stations at the production facility as well as at the Port of Corpus Christi, Bair says.

CEH also has plans to develop its own geothermal plants and explore the role that nuclear energy can play in green hydrogen. Bair Energy recently hired Eric Young as its VP of engineering and technology from NuScale, where he worked on the research team that received approvals from the U.S. Nuclear Regulatory Commission for a small modular nuclear reactor.

“We’re a technology-driven owner-operator,” Bair says. “We’re all technologists, which means we’re pathological believers in technology. We’re all looking for transformational energy.”

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CO2-to-SAF firm in $100m capital raise

A New York-based CO2-to-SAF firm is raising about $100m in equity and debt.

Dimensional Energy, the CO2-to-SAF startup based in Ithaca, New York, is in the late stages of a roughly $100m equity and debt round led internally, according to a source familiar with the matter.

The company is down to a shortlist of potential investors with two or three weeks until targeted close, the source said.

Dimensional did not respond to a request for comment.

Proprietary reactor technology powered by renewables is the core of Dimension’s regenerative process. According to its website, the company can make 15 barrels of fuel from every 10 tons of carbon sources form the atmosphere and hydrogen derived form electrolysis.

In May, the company signed an offtake agreement for 5 million gallons per year with Boom Supersonic, which is seeking to build a supersonic airliner that will travel at speeds twice as fast as today’s commercial jets.

Dimensional started production at a pilot-scale COutilization plant in Tucson, Arizona last year.

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Mitsubishi laying groundwork for additional equity raise

Mitsubishi Power Americas and its JV partners are preparing to raise additional equity for the ACES Delta project in Utah, as well as for other hydrogen developments in the Americas.

Mitsubishi Power Americas is conferring with its financial partners to raise equity from existing investors in the Advanced Clean Energy Storage (ACES) Delta green hydrogen project in Utah, Senior Vice President, Investment and Business Development Ricky Sakai said in an interview.

Haddington Ventures formed Haddington ESP I and raised $650m in June 2022 from institutional investors to fund projects developed by ACES Delta, which is a joint venture between Mitsubishi Power Americas and Haddington portfolio company Magnum Development.

The investors — AIMCo, GIC, Manulife Financial Corporation, and Ontario Teachers’ Pension Plan Board — have additional rights to increase their collective investment to $1.5bn, according to a press release announcing the deal.

The first phase of the project in Utah will be to produce 100 tons of hydrogen per day. Once that is complete, existing investors can scale up their investment, Sakai said.

ACES Delta rendering

Mitsubishi is involved in several regional hydrogen hubs applying for funding from the US Department of Energy.

Hydrogen capable

Depending on how that $7bn is ultimately allocated, Mitsubishi is interested in replicating the Utah project in other regions, a source familiar with the company said.

MPA and Magnum recently closed on a $504.4m loan guarantee from the DOE for ACES Delta, electrolyzers for which will be supplied by Norway-based HydrogenPro.

ACES Delta will support the Intermountain Power Agency’s IPP Renewed Project — upgrading to an 840 MW hydrogen-capable gas turbine combined cycle power plant using Mitsubishi’s M501JAC gas turbines. The plant will initially run on a blend of 30% green hydrogen and 70% natural gas starting in 2025 and incrementally expand to 100% green hydrogen by 2045.

Mitsubishi is also supplying the hydrogen-capable gas turbines to Entergy’s Orange County Advanced Power Station; to an Alberta coal plant owned by Capital Power; and to J-Power’s Jackson Generation Project in Illinois, which reached commercial operations last year.

Mitsubishi Power

Investing in startups

Mitsubishi is doubling down on a strategy of investing in startup producers and technology in renewable fuels, Sakai said.

Recent investments in the space include: C-Zero, a drop-in decarbonization tech startup in California; Cemvita Factory, a Houston-based synthetic biology firm focused on the decarbonization of heavy industries; Infinium, an electrofuels company innovator in California forming decarbonization solutions for industries in Japan; and Starfire Energy, a modular green ammonia solution provider in Denver.

Series A and Series B valuations for US companies are much higher now than they were a few years ago, Sakai said. Still, the US is the leading climate tech startup ecosystem in the world and provides rich opportunity for capital deployment, Sakai said. Biofuels, SAF and waste-to-energy are leading sectors for MHI investment moving forward.

“We have several hundred of these in the pipeline that we are looking at right now,” he said. “In the next few years, we will increase the number of these portfolio companies.”

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