M&A, Raising capital

US salt cavern developer selling hydrogen storage project

A US-based developer of salt cavern projects for hydrogen storage has retained a financial advisor to sell its first project and is informally seeking an equity investor.

May 18, 2023

Phoenix Hydrogen, a salt cavern storage developer based in Berkeley, California, has hired a financial advisor to run a sale of its primary project in Arizona, according to two sources familiar with the matter.

Scotiabank is leading the process, which will launch next week, the sources said. The sale is for 100% of the company’s first project near Kingman, Arizona. The project is expected to reach FID in the next 18 months.

Phoenix CEO Shawn Drost said in an interview that the company is informally seeking a platform equity investment as well but is only willing to take on a minority partner. An equity sale would need to raise an amount in the “low-tens” of millions, he said. It’s a difficult proposition, as equity providers in the space tend to demand majority positions.

The company wants to bankroll projects from beginning to end as an owner operator, he said, but requires capital to do so.

Phoenix, a six-person team, has a relationship with GHD Group for EPC, he said. The company is seeking relationships with production-side developers to sign site and storage leases.

Scotiabank did not respond to requests for comment.

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Project finance, Project news

FirstElement receives grant to expand manufacturing capacity

A $7.7m grant from the California Energy Commission is meant to help increase the output of the Santa Ana components manufacturing facility tenfold.

FirstElement Fuel has received a $7.7m grant from the California Energy Commission to increase the Company’s Santa Ana, CA manufacturing facility output by more than 10 times, according to a news release.

The California-based company is currently operating the world’s largest network of hydrogen refueling stations comprised of 85 dispensers across 40 station locations and serving hydrogen-powered vehicles across California.

The facility in Santa Ana produces components and systems for hydrogen refueling stations, including liquid hydrogen cryopump systems. FistElement will also contribute at least $14m to the project.

The manufacturing expansion project will extend through March 2026. FistElement will also increase its pump testing capability at its hydrogen logistics hub and field-testing facility in Livermore, California as part of the project.

Quantron US and FirstElement recently announced that Quantron will be one of the first to take advantage of FirstElement’s network of hydrogen stations designed for hydrogen fuel-cell electric trucks.

August 15, 2023

Innovation, Project news

United, Tallgrass, and Green Plains form JV to develop SAF from ethanol

The JV – Blue Blade Energy – aims to develop and then commercialize a novel sustainable aviation fuel technology that uses ethanol as its feedstock.

United Airlines, Tallgrass, and Green Plains Inc. today announced a new joint venture – Blue Blade Energy – to develop and then commercialize a novel sustainable aviation fuel (SAF) technology that uses ethanol as its feedstock.

If the technology is successful, Blue Blade is expected to proceed with the construction of a pilot facility in 2024, followed by a full-scale facility that could begin commercial operations by 2028. The offtake agreement could provide for enough SAF to fly more than 50,000 flights annually between United’s hub airports in Chicago and Denver.*

Blue Blade’s new SAF technology was developed by researchers at the U.S. Department of Energy’s Pacific Northwest National Laboratory (PNNL), a leading center for technological innovation in sustainable energy. SAF, which uses non-petroleum feedstock, is a low-carbon alternative to traditional jet fuel that offers up to 85%** lower lifecycle greenhouse gas emissions.

“The production and use of SAF is the most effective and scalable tool the airline industry has to reduce carbon emissions and United continues to lead the way,” said United Airlines Ventures President Michael Leskinen. “This new joint venture includes two expert collaborators that have the experience to construct and operate large-scale infrastructure, as well as the feedstock supply necessary for success. Once operational, Blue Blade Energy has the potential to create United’s largest source of SAF providing up to 135 million gallons of fuel annually.”

United, Tallgrass, and Green Plains will each provide their unique industry expertise to help develop the joint venture. Under this collaborative approach:

Tallgrass will manage research and development of the technology, including pilot plant development, and will manage the construction of the production facility.
Green Plains will supply the low-carbon ethanol feedstock, and use its ethanol industry expertise to manage operations once the pilot facility is constructed.
United Airlines will assist with SAF development, fuel certification and into-wing logistics, and has also agreed to purchase up to 2.7 billion gallons of SAF produced from the joint venture.

“At Tallgrass, we are striving to innovate how we deliver the energy that powers our nation and enables our quality of life,” said Alison Nelson, Vice President, Business Development at Tallgrass. “Air travel uniquely connects people and improves lives, and the advancement of this novel SAF technology presents a meaningful opportunity to reduce emissions from aviation. We are excited to partner with industry leaders United Airlines and Green Plains on this initiative.”

If the technology is commercialized, the location of Blue Blade’s initial plant would allow easy access to low-carbon feedstock from Green Plains’ Midwest ethanol production facilities. While the initial SAF facility intends to use ethanol, the technology has the capability to work with any alcohol-based feedstock as its fuel source.

“Our transformation to a true decarbonized biorefinery model has positioned Green Plains to help our customers and partners reduce the carbon intensity of their products by producing low-carbon proteins, oils, sugars and now decarbonized ethanol to be used in SAF,” said Todd Becker, President and CEO of Green Plains. “This partnership with world class organizations like United Airlines and Tallgrass, shows the value creation that is possible with our low-carbon platform. The potential impact of this project is a gamechanger for US agriculture, aligning a strong farm economy and a robust aviation transport industry focused on decarbonizing our skies.”

Blue Blade Energy marks one of the largest direct investments from United Airlines Ventures (UAV), United’s corporate venture arm, into SAF. Launched in 2021, UAV targets startups, upcoming technologies, and sustainability concepts that will complement United’s goal of net zero emissions by 2050 without relying on traditional carbon offsets. United has aggressively pursued strategic investments in SAF producers and revolutionary technologies including carbon capture, hydrogen-electric engines, electric regional aircraft and air taxis.

*Assuming current regulations requiring SAF to be blended with conventional jet fuel are removed to allow for the use of unblended SAF.
**Based on United’s current SAF supply

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January 31, 2023

Innovation, Project finance, Project news, Raising capital

Exclusive: CarbonFree raising capital for U.S. Steel carbon utilization project

CarbonFree, an established carbon capture utilization firm, is raising capital for its $150m plant at U.S. Steel’s Gary, Indiana steelmaking facilities.

CarbonFree, an established carbon capture and utilization firm, is raising capital to build a $150m capture and utilization plant at U.S. Steel’s Gary Works Blast Furnaces.

The San Antonio-based firm already generates revenues from existing projects, and will use cash on hand as well as additional private investments to fund construction of the project, a spokesperson for the company said via email.

“We are pursuing additional equity investments in CarbonFree, rather than project-specific financing,” the spokesperson said. “The process is ongoing.”

The company is working with a financial advisor on the capital raise, but the spokesperson declined to name the firm.

CarbonFree and U.S. Steel announced this week that they have finalized a definitive agreement to use CarbonFree’s SkyCycle technology to capture and mineralize up to 50,000 metric tons of carbon dioxide per year. Construction is expected to begin as soon as this summer with operations expected by 2026.

The technology captures carbon emissions and converts them into a carbon-neutral calcium carbonate, used to make paper, plastics, and other products.

CarbonFree CEO Martin Keighley said in previous interviews that the objective of the CCU operation is that “it can be zero capital and zero OpEx for the emitter, because, in its own right, it is a profitable operation.”

The spokesperson estimated the addressable market for the calcium carbonate it produces to be $40bn, and added that CarbonFree was actively seeking new partners in that market.

April 8, 2024

exclusive

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

Pennsylvania blue hydrogen DevCo planning project equity raise

A natural gas company has tapped an advisor and is planning to launch a process to raise project equity in the fall for a blue hydrogen production facility with contracted offtake in Pennsylvania.

KeyState Energy, a Pennsylvania-based development company, has engaged a financial advisor to launch a $60m equity process in September, according to two sources familiar with the matter.

Young America Capital is advising on the forthcoming process, the sources said.

The capital raise is for the company’s marquee Natural Gas Synthesis blue hydrogen project in Clinton County, one of the sources said. CapEx for the project is estimated at $1.5bn. OCGI is a pre-FEED investor in the project and the coming equity raise is meant to attract a FEED investor.

The 200 mtpd project has contracted offtake with Nikola Corporation, one of the sources said. In October it was reported that Nikola and KeyState were working towards a definitive agreement to expand the hydrogen supply for Nikola’s zero-emissions heavy-duty fuel cell electric vehicles.

The 7,000-acre natural gas and geologic storage site was formerly known for coal, iron and rail, according to the company’s website.

KeyState Energy did not respond to a request for comment. YAC declined to comment.

June 20, 2023

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

Project finance, Project news, Raising capital

Exclusive: Morgan Stanley mandated for green ammonia facility

Morgan Stanley is the mandated investment banker for a green ammonia developer that’s raising debt and equity for its first facility in Texas.

First Ammonia is working with Morgan Stanley as its investment banker as it seeks to raise debt and equity for a flagship green ammonia project in Texas.

The New York City-based developer is moving toward financial close this year on the first 100 MW train of a 300 MW project at the Port of Victoria, Texas. Morgan Stanley has held the mandate since last year, but it has not been previously reported.

First Ammonia did not respond to requests for comment. Morgan Stanley declined to comment.

In an interview last year, First Ammonia CEO said the 100 MW train of the Port of Victoria project is estimated to cost $300m, while the full 300 MW will cost between $900m – $1bn. Each 100 MW module will produce up to 100,000 MTPA of green ammonia.

The project is expected to be the first in First Ammonia’s global pipeline of green ammonia facilities that will eventually add up to 5 million MTPA of production within 10 years.

The firm has contracted with Haldor Topsoe for 5 GW of solid-oxide electrolysis for its project portfolio. It is seeking a partner to provide 45V-compliant renewable energy to power electrolysis at Port of Victoria, as reported exclusively by ReSource.

April 22, 2024