☀️ Nabors SPAC merges with Vast Solar while BP strikes 2 gas deals

Good Morning. This is the Sunya Scoop. The newsletter that takes energy transition news and turns it into an easy-to-read email for you.

Here’s what we have for you today:

• Nabors SPAC announces transaction with Vast Solar

• bp strikes certified natural gas deal with CF Industries

• UGI and Archaea (bp subsidiary) form JV to develop landfill RNG in Pennsylvania

• Rumor mill – China and Qatar to cut massive LNG deal

• Not so great news – Pakistani coal

SOLAR

Nabors SPAC to combine with Australian Vast Solar

• Vast Solar, a leading CSP (Concentrated Solar Power) company, to go public via business combination with Nabors Energy Transition Corp.

• It will be listed on NYSE under ticker “VSTE” and headquartered in Australia.

• Vast’s proprietary CSP system provides renewable energy for utility-scale power, industrial heat, and clean fuel production.

• Vast’s CSP technology uses a distributed modular tower design and a sodium heat transfer loop.

• Vast’s business model is to develop CSP projects using its technology and provide EPC and O&M services to those projects.

• IEA forecasts up to 430 GW of new CSP capacity globally by 2050 for on-grid applications.

• The transaction is expected to provide gross proceeds of up to USD $351 million to Vast (depending on redemptions) to fund various projects and the implied equity value of the combined company will be between USD $305 million and USD $586 million.

• The transaction is expected to be completed in Q2/Q3 2023.

NATURAL GAS

CF Industries purchases 2.2 bcf of MiQ-certified natural gas from bp

• CF Industries has purchased 2.2 billion cubic feet of certified natural gas from bp that is verified by MiQ to have 90% lower methane emissions intensity than industry average.

• This purchase of certified natural gas is the first known purchase by an industrial company for use in its ammonia production processes.

• Certified natural gas is considered a pathway for CF Industries to meet its scope 3 emissions reduction goal and reduce lifecycle carbon intensity of ammonia production.

• The natural gas is certified using not-for-profit MiQ’s methane standard, which leverages independent third-party auditors to monitor, address, and grade the gas.

• Using ‘A’ grade certified natural gas as a feedstock in ammonia production would lower a purchaser’s natural gas supply chain-related scope 3 emissions by 90% and reduce the lifecycle carbon intensity by up to 20% using a 100-year global warming potential.

• Certified natural gas alongside carbon capture & sequestration at ammonia plants could eliminate up to 94% of GHG associated with ammonia production.

• The purchase agreement will allow CF Industries to confirm its systems can track the certified natural gas through the ammonia production process.

• The Company also intends to evaluate further certified gas purchases as part of its scope 3 emissions and lifecycle ammonia production carbon intensity reduction efforts.

• This marks a huge milestone in using certified / responsibly sourced / low-emission US natural gas for industrial decarbonization use cases and we expect more to come

RNG

UGI and Archaea (bp subsidiary) form JV to develop Pennsylvania landfill RNG

• UGI Energy Services and bp subsidiary, Archaea Energy, announced a joint venture to develop a renewable natural gas project in Pennsylvania.

• The joint venture is called Aurum Renewables and will develop a new RNG facility that will process landfill gas to become RNG.

• Archaea will lead the development, engineering, construction, and operation of the new RNG facility, while UGIES will market the RNG produced by the facility.

• The project is expected to produce 5,000 MMBtu per day of pipeline-quality RNG.

• UGIES will contribute its existing 11 megawatt landfill gas-to-electricity facility.

• Archaea Holdings will hold a 60% ownership interest in the joint venture, and UGIES will hold a 40% ownership interest.

• The investment in Aurum supports UGI’s existing greenhouse gas emission reduction plans.

LNG

Rumor mill – China in talks with Qatar to wrap up LNG deal

• China National Petroleum Corp (CNPC) is in the final stages of acquiring liquefied natural gas (LNG) from QatarEnergy for nearly 30 years from the Middle Eastern exporter’s massive North Field expansion project, according to sources.

• This would marks the 2nd LNG deal between Qatar and China, as Beijing looks to increase and diversify its gas supply in a drive to replace coal and cut emissions.

• If the deal is sealed, it will strengthen CNPC’s competitiveness, as it needs other import options to mitigate any risks in line with China’s energy policy on supply diversification.

• Sinopec, another Chinese firm, agreed to purchase 4 million tonnes of LNG annually from QatarEnergy for 27 years in November 2022, the longest-duration LNG supply contract signed by Qatar.

• The two Chinese companies could be considering acquiring a stake in Qatar’s North Field expansion export facility, as part of an “integrated partnership.”

• QatarEnergy has maintained a 75% stake in the North Field expansion, costing at least $30 billion, and could give up to a 5% stake to some buyers.

• Last year, CNPC stepped up gas imports from Russia, snapping up supply that was no longer going to Europe due to sanctions amid Moscow’s war on Ukraine.

• Chinese customs data showed their imports of Qatari LNG surged 75% last year to 15.7 mm tonnes, while imports from Australia and the US dropped 30% and 77%, respectively.

• QatarEnergy signed five deals with international majors for the North Field project, a two-phase expansion plan that will boost Qatar’s liquefaction capacity to 126 million tonnes per year by 2027 from 77 million tonnes.

• This deal would likely put Qatar back on top as leader of LNG exports against the US

ENERGY SECURITY

In not so great news, a shortage of natural gas leads Pakistan to quadruple domestic coal-fired power

• Pakistan plans to quadruple its domestic coal-fired capacity to reduce power generation costs and will not build new gas-fired plants in the coming years, according to the country’s Energy Minister, Khurram Dastgir Khan.

• The country plans to increase domestic coal-fired power capacity to 10 GW in the medium-term, from 2.31 GW currently.

• “LNG is no longer part of the long-term plan,” said Dastgir, adding that the switch to coal is part of the country’s efforts to ease a crippling foreign-exchange crisis.

• Pakistan’s foreign exchange reserves held by the central bank have fallen to $2.9 billion, barely enough to cover three weeks of imports.

• Pakistan also plans to boost its solar, hydro and nuclear power fleet.

• “It’s this question of not just being able to generate energy cheaply, but also with domestic sources, that is very important” Dastgir added.

• Financial institutions in China and Japan, which are among the biggest financiers of coal units in developing countries, have been backing out of funding fossil-fuel projects in recent years amid pressure from activists and Western governments.

• In light of bids Asia and Europe is making on LNG, smaller developing countries can’t compete and have to ensure energy security above energy transition.

• Coal to gas switching is objectively the greatest decarbonization tool this decade, and it’s a shame to see a continued global growth in coal-fired power generation.

• The world needs more of America’s natural gas.

That’s a wrap for today. If you like what you read, send to a friend.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.