Good Afternoon. This is the Sunya Scoop. The newsletter that takes energy transition news and turns it into an easy-to-read email for you.
Welcome to the launch!
Here’s what we got for you today:
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Deals that caught our eye in 2022
Let’s get right into it.
DEALS THAT CAUGHT OUR EYE IN 2022
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Absolutely massive deal that had a lot of people head scratching
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Archaea (and the Rice family) built a pure-play landfill gas giant. They leased up “the core” and built something that could not be duplicated. They built the Chesapeake Energy of landfill gas.
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With BP’s move to energy transition investments and their massive downstream trading with Clean Energy, this was a natural fit.
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In terms of valuation, it will take years to find out how this plays out but one thing is for certain – BP is now poised to dominate the US landfill RNG business
2. Momentum Midstream Takes FID on 1.7 Bcf/d Haynesville Natural Gas Gathering, Carbon Capture Project
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Another great opportunity to decarbonize natural gas
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Energy private equity stepping in, with an anchor E&P like Chesapeake Energy, to create a natural gas processing plant that offsets its footprint via CCS
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Regardless if the monetization ends up being 45Q or just an avenue for Net Zero credit, imagine this is will be the first of many Haynesville CCS projects
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North Dakota, Harold Hamm and a whole lot of CO2
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One of the most straightforward plans – sequester CO2 in state with primacy and quality storage reservoir and collect low-cost feedstock
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Can see this setting a pretty interesting precedent with other projects underway:
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Step 1 – secure a string of pearls with high-purity emitters like ethanol and ammonia plants
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Step 2- partner with a big E&P who provides a checkbook and expertise to sequester
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Majors getting in early
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With reports earlier in the year of Exxon buying up Denbury for $5bn to build their carbon capture division, it seems Chevron took another avenue: get in early
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Talos and Carbonvert were collectively early movers in Gulf Coast CCS
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Didn’t take long before bringing in a strategic investment from Chevron which could pan out much more interesting than alternative capital
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Chevron JVed in the RNG space with Mercuria and Beyond6 in late 2021 and announced an intention to acquire the entire business, a year later
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Yes, two Rice deals on the same list. A monumental 2022 for them.
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While it’s still early days, the idea of making natural gas power plants carbon-free via carbon sequestration could be a game-changer for both the natural gas industry and provides a practical pathway to industrial decarbonization
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Combining the IRA incentives, these power plants could be almost completely subsidized by 45Q credits
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Time will tell but Danny Rice at the helm combined with a capital stack of strategic investors including Oxy, Baker Hughes and Constellation Energy give this the best chance of moon-shoot
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.