TPG Rise acquires fuels testing and certification company

The target firm, AmSpec, increasingly facilitates the penetration of biofuels, hydrogen, sustainable aviation fuel, and other alternatives throughout the global fuel system.

October 11, 2023

TPG Rise Climate, the dedicated climate investing strategy of TPG’s global impact investing platform TPG Rise, has signed a definitive agreement to acquire AmSpec Group, Inc., one of the fastest growing Testing, Inspection, and Certification (TIC) companies specializing in energy, commodities, and fuels.

AmSpec’s existing majority shareholder, Olympus Partners, will retain a minority interest in the company. Additional terms of the investment were not disclosed.

Goldman Sachs and Baird served as financial advisors and Morgan Lewis served as legal counsel to AmSpec in relation to the transaction.

Founded in 1986, AmSpec operates an extensive global footprint of over 300 inspection sites and laboratories throughout 61 countries, many of which are located at key industrial centers, ports, or trade hubs. AmSpec’s core service involves testing and certifying the performance and emission qualities of fuels or commodities at each stage along the value chain.

By monitoring and reporting to regulators and independent certification bodies, AmSpec plays a key role in emissions controls and enforcement on conventional fuels, while also increasingly facilitating the penetration of biofuels, hydrogen, sustainable aviation fuel, and other alternatives throughout the global fuel system.

“As part of its broad set of services, AmSpec has developed deep expertise in the control of pollutants and emissions factors in legacy fuels, and they will play a critical role in processing, testing, and certifying the growing volume of increasingly complex renewable fuels that we see coming online,” said Marc Mezvinsky, Partner at TPG and senior member of its climate investing team. “We are thrilled to be investing in AmSpec’s best-in-class lab network at this inflection point in the global fuels mix, and we look forward to working closely with the management team to enter new markets and accelerate the global energy transition.”

As part of the transaction, Mezvinsky will join AmSpec’s Board of Directors along with TPG Rise Climate’s Roger Stone and Tracy Wolstencroft, a TPG Senior Advisor who served as former president and CEO of both the National Geographic Society and executive search and management consulting company Heidrick & Struggles. He also served as former chair of Goldman Sachs’ clean energy technology practice.

“Our commitment to innovation and service has made us a leader in the industry, and we are excited about what we will be able to accomplish with this new partnership. TPG Rise Climate has the resources, network, and vision to drive our next phase of growth, particularly as global supply chains rapidly change and the flows of critical molecules begin to transition,” said Matt Corr, CEO of AmSpec. “Our team is fully aligned with TPG on capturing the opportunity set in front of us and we are grateful to have Olympus’s continued partnership and support.”

The transaction is subject to regulatory review and customary closing conditions and is expected to close in the fourth quarter of 2023.

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Personnel moves

California Resources appoints CFO from Sempra Energy

CRC has appointed Nelly Molina as its new CFO. She most recently held senior finance positions at Sempra Energy.

California Resources Corporation, an independent energy and carbon management company committed to energy transition, today announced that Manuela (Nelly) Molina has been appointed as executive vice president and chief financial officer, effective May 8, according to a news release.

As previously announced, CRC’s prior CFO Francisco Leon was named President and Chief Executive Officer and a member of the Company’s Board of Directors as of April 28, 2023.

Molina is an energy executive with more than 25 years of corporate finance, capital markets and project financing experience and brings an extensive background in the development of energy infrastructure projects in the natural gas and power sectors. She joins CRC from Sempra Energy, where she held various senior finance leadership roles, including most recently as vice president of audit services and vice president of investor relations.

Earlier in her tenure at Sempra Energy, she served as CFO of Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova), a subsidiary of Sempra Energy, which was listed on the Mexican Stock Exchange until October 2021. During her time at IEnova, she completed over $10bn of financing initiatives, including the company’s initial public offering. Previously, Molina served in leadership roles with Kinder Morgan and the former El Paso Corporation in Mexico.

“I am thrilled to welcome Nelly to the CRC team,” said Francisco Leon, president and CEO of CRC. “She has a strong track record of driving growth and expertise in navigating today’s evolving energy industry. With her financial acumen and prior experience in disciplined planning, execution and compliance, I look forward to working together as we continue to advance on our strategic realignment of our business operations and structure and focus on driving cash flow generation, enhancing our financial flexibility and delivering value for our shareholders.”

Molina said, “I am honored to join CRC as its next CFO and build upon the Company’s strong financial foundation. This is a great organization with significant opportunities for sustainable future growth and value creation. As the Company carries on with its energy transition initiatives, I’m excited to work with Francisco and the rest of the team to expand on the carbon management business, safely produce and deliver low carbon intensity energy to the local communities where CRC operates and help California achieve its climate goals.”

May 1, 2023

Innovation, M&A, Project finance, Project news, Raising capital, Regulatory

California Resources considering equity investments in hydrogen, ammonia projects

California Resources management is evaluating equity investments in four California hydrogen and ammonia projects, starting with Lone Cypress, a 30-tons-per-day blue hydrogen facility.

California Resources management continues to evaluate potential equity investments in projects for which the company has signed carbon management agreements, including California hydrogen and ammonia projects, as it moves toward a separation of the carbon management business, Carbon Terravault.

Carbon Terravault, a JV with Brookfield, has so far signed four carbon dioxide management agreements, bringing the total injection rate to 610,000 MTPA of CO2, with 200,000 targeted to its Elk Hills reservoir and 410,000 MTPA targeted in the Sacramento basin area.

CEO Francisco Leon said in prepared remarks yesterday that Carbon Terravault is still in the early stages and must achieve certain milestones before initiating a separation, “such as an EPA Class VI permit approval, project FID, line of sight to first CO2 injection and first cash flow among others.”

In the meantime, the company and Brookfield have “preserved the right to invest into the equity of all four projects,” Leon said, starting with a review of the Grannus Blue Ammonia and Hydrogen Project and the Lone Cypress Hydrogen Project.

Grannus aims to be California’s first blue ammonia and hydrogen facility producing 150,000 MT per annum of blue ammonia and 10,000 MT per annum of blue hydrogen, while Lone Cypress is a 30-tons-per-day blue hydrogen facility at Elk Hills.

“We’re reviewing not only the cost profile of those businesses, but the market, in a lot of cases” – such as with hydrogen – “is not very well developed, but there’s a lot of interest. And that also requires understanding the offtake contracts and in the depth of the market, in where they best place the hydrogen and the ammonia.”

He added, “We’d like to have a decision this year on Lone Cypress in particular. That’s going to be the first project we’re reviewing the equity. We think these markets will develop nicely in California. There’s a lot of support again by IRA, hydrogen has 45V that supports it, but we’re seeing a lot of potential demand for the product. So at both Brookfield and CRC, we have retained that ability to invest in the equity and it’s something that gets us very excited about participating in these new energy verticals.”

The JV has the right to participate in the Lone Cypress blue hydrogen facility up to and including a majority equity stake, a presentation shows.

“You should expect to see over time as we do more and more of these that we’re going to have multiple models,” Chief Sustainability Officer Chris Gould said last year in an interview with ReSource, noting that a typical financial structure may emerge as the industry matures.

The company this week said it signed storage-only CDMAs with Yosemite Clean Energy and InEnTec Inc. for 40,000 and 100,000 MTPA of CO₂ injection, respectively. The four combined agreements amount to 12% of the company’s pore space.

CRC also submitted Class VI permit applications for a new development area, called CTV IV, for an additional 34 million metric tons, bringing Carbon Terravault’s total potential permitted storage to 174 million metric tons or over 85% of its stated 2027 target of 200 million metric tons.

The Elk Hills complex includes a gas-fired power plant, and the company is evaluating whether the plant would move with a potential spin-off of Carbon Terravault. CRC is conducting a second FEED study in two years – the first with Flour, now with NextDecade – to evaluate the installation of a carbon capture system at the plant.

Addressing the need for a second FEED study, Leon said, “We’ve had a lot of inflationary pressures over the last two years. We want to make sure it’s the project that not only delivers that ability to reduce that CO2 emission footprint, but it’s also a profitable project.”

May 3, 2023

Innovation, Project news

Equatic releases whitepaper on carbon dioxide removal

A fledgling company with a relationship with Boeing is marketing a process for seawater electrolysis to capture and store CO2 while producing hydrogen.

Carbon removal company Equatic has developed a process that relies on seawater electrolysis to capture and store CO2 while producing clean hydrogen, according to a news release.

A white paper written with consultation from EcoEngineers outlines Equatic’s approach to quantifying and verifying the carbon removal process.

Equatic operates two pilots in Los Angeles and Singapore. The company sells carbon removal credits and recently announced a pre-purchase option agreement with Boeing.

Under that agreement, Equatic will remove 62,000 metric tons of carbon dioxide and will deliver 2,100 metric tons of carbon-negative hydrogen to Boeing.

August 15, 2023

Project finance, Raising capital

Exclusive: Mississippi green hydrogen developer assembling banks for debt raise

The developer of a potentially massive network of green hydrogen production, transport and salt cavern storage — estimated to cost billions — is seeking banks to support a project debt raise.

Hy Stor, the developer of hydrogen generation and salt cavern storage, is currently raising “billions” in project finance for the first phase of its home state hub in Mississippi, Chief Commercial Officer Claire Behar said in an interview.

The first phase is expected to enter commercial service in 2026, guided by customers, Behar said.

Connor Clark & Lunn are equity partners in the Mississippi hub and is helping Hy Stor with its debt raise. Hy Stor is working with King & Spalding as legal advisor.

“We are already seeking banks and lining up our needed debt,” Behar said. She declined to say a precise amount the company will raise but said it will be in the billions.

Hy Stor plans to soon announce their renewable development partner to build dedicated off grid renewables, Behar said. The same is true for offtake in non-intermittent 24-hour industries like steel, plastic and fertilizer manufacturing.

“The customers are willing to pay that twenty-to-thirty percent premium that the market would need,” Behar said. “The business case is there.”

When asked if traditionally carbon intensive industrial manufacturing interests were actively seeking to co-locate with Hy Stor in Mississippi, Behar said the company has been advancing those agreements and hopes to have announcements soon.

There is evidence of this type of activity in the state. Recently American steel manufacturer Steel Dynamics announced Columbus, Mississippi as the location of its upcoming aluminum flat rolled mill, with a focus on decarbonization. Job postings for engineering roles at a separate facility detail plans to convert biomass into a direct carbon replacement suitable for steelmaking.

Hy Stor hopes to have announcements in the coming weeks about a co-location opportunity, she added. Both domestic and international strategics are interested in the geology offering co-located salt cavern storage and geography offering river and deepwater port logistics networks, as well as highway and rail corridors.

Off-grid renewable generation means the company is not at the mercy of transmission interconnection queues. It also offers reliability because the lack of grid adage helps guarantee performance, and affordability because the company doesn’t have to pay utility rates, Behar said. Additionally, the electricity is decoupled from the grid and therefore absolutely decoupled from fossil fuels, which is important to Hy Stor’s prospective offtakers.

“This is what customers are demanding,” Behar said, adding that first movers are highly dedicated to decarbonization, needing quantitative accounting for all scope emissions, driven often by pressure from their customers.

The company has received a permit to take 11,000 gallons per minute of unpotable water from the Leaf River in Mississippi, Behar said, and is also looking at in-house wastewater treatment and water recycling.

Don’t go after gray users

Behar said the concept that users of gray hydrogen are the first targets for green hydrogen developers is misguided.

“The refineries, the petrochemicals, for them hydrogen is an end product already used within their system,” Behar said. “Those are not going to be the first users that are going to pay us a premium for that zero carbon.”

Hy Stor is instead focusing on new greenfield facilities that can co-locate.

“We’ve purposefully outsized our acreage,” she said of the 70,000 acres the company has purchased outside of Jackson, Mississippi, the Mississippi River Corridor, and the state’s southern deepwater ports in Gulfport and Port Bienville. New industrial projects can co-locate and have direct access to the salt cavern storge.

Looking forward the company’s acreage and seven salt domes mean they are not constrained by storage, Behar said. At each location, the company can develop tens and hundreds of caverns.

February 9, 2024

exclusive

Project news

Air Products CEO discusses mega-scale green hydrogen project with AES

Air Products CEO Seifi Ghasemi further discussed its JV with AES Corporation to develop a $4bn green hydrogen project in Texas, noting that roughly half the price tag would come from developing 1.4 GW of renewables to feed the electrolyzers.

Air Products and AES Corporation will form a JV to develop a $4bn integrated green hydrogen facility in Texas, with roughly half of the cost coming from development of 900 MW of wind and 500 MW of solar generation, and the other half for the hydrogen build-out, Air Products CEO Seifi Ghasemi said on an investor call today.

Similar to his company’s JV in Saudi Arabia, the 50/50 JV will develop, build, own and operate a facility in Wilbarger County, at the site of a decommissioned coal-fired plant, Ghasemi said on the call.

Air Products has an exclusive global agreement with thyssenkrupp for electrolyzers, and could include battery storage at the Texas site to help power the electrolyzers, he added.

A separate entity owned 100% by Air Products will be the sole offtaker from the facility, Ghasemi said, which will produce more than 100 mtpd for use in transportation and industrial markets.

The relationship between AES and Air Products is not exclusive, he said.

Air Products expects a minimum internal rate of return of 10%, Ghasemi said. The company is hoping the tax benefits of the project will result in a lower hydrogen price from the JV.

The amount of capital invested by Air Products will be determined by downstream uses, Ghasemi said. The company has yet to decide if it will build a liquefaction plant, transport gaseous hydrogen by pipeline, or convert the hydrogen to ammonia and ship it by rail.

When it was noted that there is not an existing pipeline connecting Wilbarger County to Air Product’s Gulf Coast pipeline, Ghasemi said he was being pressured to get more deeply in the topic than he wanted, but that the company was confident emerging industry in the area would provide the necessary offtake.

“We don’t have to send it all the way down 250 miles to our existing pipeline,” Ghasemi said. “There’s a lot of different options.”

Air Products will not issue new stock to dilute shareholders or jeopardize its A-rating, Ghasemi said.

The labor cost is “very low on these projects,” Ghasemi said. And customers are attracted to getting 30-year contracts not associated with the price of oil, natural gas or geopolitics.

Air Products is investing approximately $500m for a 35 metric ton per day facility to produce green liquid hydrogen at a greenfield site in Massena, New York, as well as liquid hydrogen distribution and dispensing operations.

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December 8, 2022

exclusive

Innovation, Raising capital, Regulatory

Ammonia-to-industrial heat provider raising early-stage capital

An early-stage technology provider targeting clients in hard-to-abate industries is engaging investors and financial advisors to raise a seed round, with sites on a Series A in 2025.

Captain Energy, a Houston-based provider of ammonia-to-industrial heat technology, is seeking strategic investors for an early-stage seed round with plans for an eventual Series A, co-founder and interim-CEO Kirk Coburn said in an interview.

The company is developing a single-step process that can create industrial heat from cracked ammonia up to 700 degrees Celsius with zero NOX emissions, with hydrogen as a byproduct, Coburn said. The process uses a ceramic-based tubular solid oxide fuel cell that Captain manufactures in Dundee, Scotland.

“The results from the testing are that we’re 85% efficient,” Coburn said.

He likened the company to Amogy, but serving steel, cement and chemicals instead of transportation. Getting the kind of high-quality heat those industries need in a clean way can only come from a few sources, he noted.

“Ammonia is one of the greatest ways to do it if you can crack it efficiently like we can,” he said.

Past lab

The company is “past the lab stage” and needs to develop a pilot product to showcase to customers, Coburn said. About $5m will get the company to a 100-kilogram-per-day product, up from 25 kilograms now.

“That’s not, probably, big enough for most customers, but we can stack them,” Coburn said. “At this point we need to demonstrate commercially the product… after showcasing it we want to make larger units.”

Captain is owned by three co-founders, including Coburn. They have an 18-month line of site on a “much larger” Series A, Coburn said.

Strategic investors that would be end users of the technology are of interest to the company, particularly in Asian and European markets.

“We’re not getting in the game of making ammonia,” Coburn said. “We have to buy green ammonia.”

The company’s model is at “grid-parity” in Europe now, Coburn said, pointing to Germany in particular.

“We think we’re almost at subsidy-free pricing,” he said.

November 2, 2023