Enbridge goes all-in on nat gas

Same poll from Tuesday. No need to vote twice. Survey results revealed next week.

Corpus CO2 storage contract awarded to Repsol, Carbonvert, Mitsui and POSCO

• The Texas General Land Office (GLO) has awarded a contract for CO2 storage to a partnership led by Repsol, covering over 140,000 gross acres of pore space owned by the Permanent School Fund (PSF) offshore of Corpus Christi, Texas.

• The partnership includes Repsol as the operator, along with Carbonvert, MEPUSA (Mitsui E&P USA), and POSCO, bringing expertise in oil and gas, carbon capture and storage (CCS), industrial, and renewable projects.

• The project aims to create a carbon storage hub in proximity to over 35 million metric tons of industrial emissions, with an additional 20 million metric tons of anticipated emissions by 2035.

• Equity interests in the partnership are distributed as 40% Repsol (Operator), 40% Carbonvert, 10% MEPUSA, and 10% POSCO.

• The partnership was unanimously approved to receive leases for the Port Arkansas North and Mustang Island tracts, with a combined storage capacity of over 600 million metric tons of CO2.

• The project is seen as a significant step in expanding Repsol’s presence in low carbon developments and benefiting the global low carbon portfolio.

• The consortium will enter a negotiation stage with the Texas GLO, and final terms are subject to approval by the Texas School Land Board.

• Carbonvert CEO Alex Tiller views the project as a boost for South Texas’ economy, generating revenue for the Texas public school system over the next 30 years.

• MEPUSA sees the Corpus Christi region as a hub for low carbon solutions and energy transition.

ADNOC makes final investment decision for Middle East carbon capture project

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• ADNOC is investing in one of the largest carbon capture projects in the MENA region.

• The project, called the Habshan carbon capture, utilization, and storage (CCUS) project, will have a capacity to capture and store 1.5 million tonnes per annum (mtpa) of carbon dioxide (CO2) underground.

• This initiative is part of ADNOC’s decarbonization plan, and it will triple their carbon capture capacity to 2.3 mtpa, equivalent to removing over 500,000 gasoline-powered cars from the road annually.

• The project includes carbon capture units, pipeline infrastructure, and wells for CO2 injection, with the CO2 permanently stored in underground reservoirs.

• ADNOC’s Net Zero by 2045 ambition is supported by an initial $15 billion investment in low carbon solutions.

• ADNOC aims to connect all sources of emissions and sequestration sites to accelerate decarbonization goals and is implementing technology-driven pilot projects, including CO2 mineralization and carbon sequestration.

• Sustainability is at the core of ADNOC’s strategy, including investments in renewables, low carbon fuels, hydrogen, climate technology, and nature-based solutions like mangrove planting.

• ADNOC and Occidental are exploring investment opportunities in carbon capture and storage in both the UAE and the United States.

• ADNOC is taking steps to decarbonize its operations, including sourcing 100% of grid power from nuclear and solar sources and developing a sub-sea transmission network to reduce offshore carbon intensity.

   

Microsoft teams up with Heirloom on $200 million in carbon removal

• Microsoft is purchasing carbon-removal credits from startup Heirloom Carbon to remove up to 315,000 metric tons of carbon dioxide over 10 years, worth at least $200 million.

• This deal is one of the largest purchases of carbon-removal credits and will help Microsoft offset emissions equivalent to 70,000 gasoline-powered cars.

• Heirloom Carbon uses crushed limestone to accelerate the natural process of carbon absorption, reducing it from years to days.

• The limestone is heated to about 1,650 degrees Fahrenheit, separating the carbon dioxide, which is stored underground or in concrete.

• The resulting calcium oxide powder is combined with water to form calcium hydroxide, which absorbs carbon dioxide over three days.

• Heirloom Carbon aims to raise investment to build its first large-scale project and expand its carbon-removal efforts.

• The startup plans to contribute funding equivalent to government grants for its projects.

• The company is collaborating with government-funded initiatives to advance carbon-removal technologies.

• Microsoft and other businesses are investing in carbon-removal solutions to address climate change.

• The sector is expected to see technology improvements and cost reductions over time, similar to the evolution of wind and solar energy.

   

Enbridge buys $14 billion of natural gas distribution from Dominion

• Dominion Energy plans to sell several of its natural gas-distribution companies to Enbridge for $9.4 billion.

• Enbridge, a Calgary-based pipeline operator, will pay $9.4 billion in cash and take on $4.6 billion in debt to acquire these gas-distribution companies.

• These companies operate pipeline networks in Ohio, North Carolina, and parts of the Western U.S.

• Dominion’s decision to sell its natural gas assets aligns with its focus on investing in renewable energy and enhancing the electric grid.

• This move comes amid ongoing debates among lawmakers and regulators in the U.S. about the future of natural gas use in various applications.

• Utilities like Dominion are considering the modification, repurposing, or sale of their natural gas delivery networks as they face the risk of becoming stranded assets.

• Dominion aims to adapt to higher demand driven by electric vehicle adoption, data center expansion, and efforts to phase out natural gas for home heating and cooking.

• The electrification of homes and businesses is a key element of the Biden administration’s climate agenda, which includes tax incentives for electric appliances and fixtures.

• The sale of Dominion’s gas distribution companies is not directly related to gas bans but is driven by strategic considerations.

• Enbridge anticipates that the acquisition will make its gas utility business the largest in North America by volume, pending closure of the deal by the end of the next year.

US offshore wind facing challenges

• Offshore wind farms, seen as a climate crisis solution, are facing financial challenges.

• Ørsted, a major offshore wind-farm developer, has lost over $10 billion (a third of its market value) due to potential impairments on its U.S. projects, with Moody’s further downgrading its stock.

• Permitting delays, rising costs, and higher interest rates have eroded expected returns on wind farm projects off the U.S. coasts.

• The Biden administration aims to expand offshore wind capacity to 30 gigawatts by 2030, with subsidies from the Inflation Reduction Act.

• Ørsted and other companies may abandon projects without additional government support.

• Shell and Avangrid are reconsidering their U.S. offshore wind projects and face fines.

• Turbine manufacturers like Siemens Gamesa and Vestas, responsible for most turbine blades and nacelles outside China, are losing money.

• Offshore wind farms are vulnerable to rising interest rates due to longer construction timelines and higher upfront costs.

• Building a U.S. offshore wind farm can cost $4,000 per kilowatt, compared to $1,360 for onshore farms and $1,050 for solar facilities.

• Politics, transmission bottlenecks, unfavorable seabed auction terms, and supply chain issues hinder the industry.

• Innovation led to larger turbine models but created obsolete supply chain components, affecting installation.

• Governments may need to cover rising input costs to incentivize offshore wind power and overhaul permitting processes.

• Even in Europe, the offshore wind industry’s growth has slowed.

• The industry and policymakers must collaborate to adapt to changing financial markets and find sustainable models for offshore wind power.

Chevron, Trafigura, and Pape close investment in OneH2

• OneH2, a hydrogen distribution and fueling business, has closed its latest funding round with investments from Chevron U.S.A. Inc., Trafigura, and The Papé Group.

• The specific terms of the transactions were not disclosed.

• The funds raised will be used to accelerate the development and deployment of mid-scale hydrogen generators and fuel distribution solutions, aiming to offer lower carbon solutions to customers.

• Chevron’s investment underscores its commitment to exploring diverse energy sources, with the goal of advancing hydrogen as a viable and economical energy source.

• Trafigura and The Papé Group have also shown continued confidence in OneH2’s strategic direction and commitment to practical hydrogen fueling technology.

• OneH2’s growth is seen as a significant step towards hydrogen adoption in the United States.

• The Papé Group’s investment aligns with its focus on providing solutions in the lower carbon energy sector to meet regulatory trends and customer needs.

Allianz unveils net zero plan

• Allianz announces its first net-zero transition plan with 2030 intermediate targets for core business segments.

• Allianz aims to profitably grow revenues from transition solutions in its commercial insurance portfolio by 150% and provide additional investments of 20 billion euros by 2030.

• Intermediate targets include a 30% carbon emission reduction target for the retail motor segment and a 45% greenhouse gas (GHG) emission intensity reduction in the commercial insurance segment by 2030.

• Allianz’s investment portfolio has exceeded its 2025 GHG emission reduction target and now aims to halve GHG emissions by 2030.

• The company reinforces its commitment to drive decarbonization in collaboration with customers, partners, and policymakers to encourage the net-zero transition.

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.