Resource logo with tagline

Yara and Enbridge to develop Corpus Christi blue ammonia project

The companies have signed an LOI to develop the facility as equal partners, with Yara expected to contract for the full offtake.

Yara Clean Ammonia and Enbridge have signed a letter of intent to jointly develop and construct a world scale low-carbon blue ammonia production facility as equal partners.

The proposed facility, which includes autothermal reforming with carbon capture, will be located at the Enbridge Ingleside Energy Center (EIEC) near Corpus Christi, Texas.

Once operational, the production facility will be capable of supplying low-carbon ammonia to meet growing global demand, with an expected capacity of 1.2–1.4 million tons per annum. Approximately 95 percent of the carbon dioxide (CO2) generated from the production process is anticipated to be captured and transported to nearby permanent geologic storage. If confirmed through the Front-end Engineering Design (FEED) phase and approved, total project investment is expected in the range of $2.6–US$2.9bn, with production start-up in 2027/2028.

Enbridge and Yara will utilize their complementary strengths to develop and execute the project. Yara’s industry-leading experience in ammonia development, production, operations and distribution, combined with Enbridge’s large-scale infrastructure development expertise and world-class EIEC deep water docks and export platform, will be critical to advancing the project from development through to commercial operation. In addition, Yara, the world’s largest ammonia distributor, is expected to contract full offtake from the facility, which further enhances the strategic value and commercial viability of the project.

Enbridge’s Texas Eastern Transmission Pipeline is expected to provide the transportation service for feed gas that will be used for the production process, and Enbridge, along with Oxy Low Carbon Ventures, is advancing a nearby CO2 sequestration hub which is a potential destination for the project’s captured CO2.

The construction of any facilities will be subject to receipt of all necessary regulatory approvals.

“We are excited to partner with Yara and collaborate on this clean energy project, especially given their expertise in global ammonia projects, operations and distribution,” said Colin Gruending, Enbridge executive vice President and president, Liquids Pipelines. “EIEC is well positioned to become the most sustainable export terminal in North America through low-carbon fuel production, carbon capture and solar self-power.”

“Yara is pleased to be joining Enbridge in developing this significant clean ammonia project. As presented at our Capital Markets Day, we are working systematically to develop project opportunities in the U.S. and this project will significantly contribute to our strategy of decarbonizing agriculture as well as serving new clean ammonia segments such as shipping fuel, power production and ammonia as a hydrogen carrier,” said Magnus Krogh Ankarstrand, president of Yara Clean Ammonia.

Unlock this article

The content you are trying to view is exclusive to our subscribers.
To unlock this article:

You might also like...

Exclusive: Modular green ammonia firm eyeing capital raise

A green ammonia firm with distributed modular technology is beginning discussions with advisors for future capital raises. It has $1bn of indicated interest in its global sales pipeline.

Talus Renewables is seeking to scale the deployment of its modular green ammonia offering with an additional capital raise.

The start-up is beginning discussions with potential bankers that could advise on a Series B capital raise, as its pipeline grows for distributed ammonia production systems that it can deliver globally, Co-Founder and CEO Hiro Iwanaga said in an interview.

Image: Talus Renewables

Talus offers containerized systems that produce green ammonia from power, water, and air, in the form of the TalusOne (up to 1.4 tonnes of green ammonia daily) and talusTen (up to 20 tonnes per day).

The company delivered its first system to Kenya Nut Company, a multinational agricultural firm in east Africa, under a 15-year fixed-price ammonia offtake agreement, Iwanaga said. The company has a pipeline of approximately $1bn of indicated interest for ammonia from potential customers, which include large farms and mining companies in several global jurisdictions, including the US.

He declined to comment specifically on how much the company would seek to raise in its next fundraising round, but said, “We have the demand for a $1bn worth of systems.” He added that, though the technology is largely proven, there is a perception of “young company risk” that the firm will need to overcome by delivering and operating its first systems.

Iwanaga, who views the company as a yieldco, required to raise several hundred million dollars every year to deploy its assets, is starting discussions with banks about advisory work for future capital raises.

“I think about our company as an infrastructure company,” he said. “We sign 10- to 15-year-long, fixed-price committed offtake agreements, and these projects earn 10% – 25% unlevered returns.”

A recently completed $22m Series A fundraising will fund the delivery of the next three to four systems before the end of the year, Iwanaga said, stretching Talus’ footprint to Europe and the US, with one more system heading to South America.

The company is deploying to large farms and mining companies, where ammonia is used as a blasting agent. In the US, the company has partnered with agribusiness Wilbur-Ellis and farmer-owned cooperative Landus, Iwanaga said.

Scaling quickly

While many green ammonia projects are popping up around the world, Iwanaga emphasizes that Talus will be able to deliver tons in the next 1 – 2 years, compared to the multi-year project timelines for larger projects requiring more complex supply chains.

“What we’re focused on is improving cost, reliability, and sustainability by driving local production – on-site or near-site production,” Iwanaga said.

Talus has several LOIs for offtake and is working to reach final agreements – work that takes several months at a good site and includes leasing land, permitting, and connecting to power.

The Talus systems are manufactured currently in China, Vietnam, and the US, but the company is moving the majority of its operations out of China and into Vietnam, while some of the Vietnam operations are moving to the US.

The company has partnered with a global auto OEM to lead its manufacturing, which has allowed it to scale quickly.

“Manufacturing a complex, high-temperature, high-pressure gas handling system is very difficult,” he said. “That [OEM] partnership has allowed us to scale in a way that I don’t think very many others have,” he said.

Read More »

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.

Read More »

Hydro-Quebec drops 1.2bn green hydrogen project near Montreal

Hydro-Quebec has dropped out of a planned green hydrogen project for financial reasons.

Hydro-Quebec has dropped out of a planned $1.2bn green hydrogen project for financial reasons, according to a report in the Financial Post.

The item noted that, in order to keep the project viable, Quebec’s ministry of economy and innovation will invest an additional $284 million — bringing its total spend to $364 million — and that its strategic partners, Suncor Energy Inc., Shell Plc and Switzerland-based chemicals company Proman AG, would “contribute in an equivalent way to their current shareholding proportion.”

Read More »
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.”

Read More »

Exclusive: Hydrocarbon recycling firm raising pre-IPO equity

An early-stage company capturing and recycling CO2 from hydrocarbon engines in the northeastern US and Germany has hired an investment bank to help them with a public listing and is raising pre-IPO platform equity.

ESG Clean Energy, a Massachusetts-based carbon capture and recycling firm formed in 2016, plans to go public in 2025 but will first raise pre-IPO platform equity, CEO Nick Scuderi said in an interview.

ESG Clean Energy will change its name in a re-brand and has hired an investment bank to help with the IPO, which does not yet have a targeted quarter, Scuderi said. He declined to name the advisor.

After the name change but prior to the public listing, ESG is seeking to raise between $20m and $40m in platform equity, he said. The company is interested in a traditional IPO, not a SPAC or private debut opportunity.

Angel investors have backed the company to date, with some $40m total raised, Scuderi said. He owns a controlling stake in the company.

Power, water and CO2

ESG Clean Energy, billed as a thermal dynamics and fluid mechanics engineering company, has patented technology for use in fossil combustion engines – both piston-driven engines and bottoming cycles (secondary thermal dynamic waste-to-energy systems). Exhaust is treated to produce CO2 and water.

The technology is commercialized, producing power at a facility in Holyoke, Massachusetts under a 5 MW/20-year PPA with Holyoke Gas & Electric. The 5,000 square-foot plant in the city proper has two Caterpillar G3520 natural gas engines each producing 2 MW of power running on natural gas during peak hours.

The waste-heat from Holyoke One is used to create commodities, including distilled water.

“What we have is a design, a system, where we utilize our technology to separate the water from the exhaust,” Scuderi said. “We can utilize this technology in any power plant in the US that’s running on natural gas.”

In arid regions, the distilled water aspect has obvious potential. The Holyoke One facility makes up to 14,000 gallons of distilled water per day, Scuderi said.

The system is also applicable in ICE engines, Suderi said. The company has been in discussions with auto manufacturers to license ESG’s IP; he declined to name which auto companies.

The CO2 is sold to offtakers who do not re-emit it into the atmosphere, such as cannabis growers and CO2 beverage makers. ESG is also able to sell carbon credits.

Bankable opportunities in the US and Germany

Holyoke One, at a cost of $20m, can be replicated throughout the US and, post-IPO, ESG has eyes on power projects in New England, California and Florida, Scuderi said.

Power plants that produce from 100 MWh to 200 MWh will cost between $400m and $450m, and each of those projects will be set up as a separate LLC, Scuderi said. The demand is particularly large in powering data storage.

“We have different [investment] funds that are very large that are willing to put up the money” to fund the projects, Scuderi said. “It’s bankable because the power sales agreement is tied to a data storage company that’s triple-A rated.”

Data-heavy geographies like Virginia are targets for this kind of development, and ESG plans to sharpen its focus on these projects, as well as project finance efforts, following the IPO.

Now, the company has six large scale projects in development in Germany, including one advanced project serving a cloud computing offtaker in the Berlin area, needing 150 MW to 200 MW of power per hour, Scuderi said.

“In Germany, we’re very far along with getting power sales agreements,” he said. “Once we deploy this technology in one location, the world’s going to want it.”

Read More »

Welcome Back

Get Started

Sign up for a free 15-day trial and get the latest clean fuels news in your inbox.