SLB’s $400 million Aker Carbon bet

Aker Carbon Capture and SLB announce ~$500 million joint venture

• Aker Carbon Capture ASA (ACC) and SLB have announced a joint venture to merge their carbon capture businesses, aiming to accelerate industrial decarbonization efforts.

• The collaboration will integrate their technology portfolios, expertise, and operational platforms to enhance carbon capture solutions’ market delivery.

• SLB will hold an 80% stake in the new entity, while ACC will retain 20% ownership.

• The merger seeks to establish a global carbon capture enterprise with a broad technology range, aiming for rapid market expansion and profitability.

• SLB will purchase an 80% share in Aker Carbon Capture Holding AS (ACCH) from ACC for NOK 4.12 billion (approximately USD 383 million).

• ACC will keep NOK 0.40 billion (approximately USD 37 million) in cash after the transaction.

• ACC is set to receive up to NOK 1.36 billion (approximately USD 126 million) in performance-based payments between 2025 and 2027.

• ACCH will acquire SLB’s carbon capture division for USD 50 million.

• A shareholders’ agreement will regulate the joint venture, detailing board representation, governance, and financial terms for the future.

• Three years post-transaction, ACC can sell its 20% interest in ACCH to SLB, with the price ranging from NOK 1.03 billion (approximately USD 96 million) to twice that value, while SLB will have a subsequent option to buy at a higher minimum price up to 2.5 times the initial amount.

This marks the largest carbon capture technology deal since Oxy’s purchase of Carbon Engineering last summer for $1.1 billion.

Project Cypress DAC hub receives first $50 million from DOE

• Project Cypress, led by Battelle with Climeworks and Heirloom, received funding from the U.S. Department of Energy (DOE) for a Direct Air Capture (DAC) Hub in Louisiana.

• The funding, part of the Bipartisan Infrastructure Law’s Regional DAC Hubs program, includes an initial $50 million from the DOE and $51 million in private investment.

• Project Cypress aims to remove 1 million tons of CO2 annually by 2030 and is eligible for up to $600 million in matched federal funds.

• Site selection is ongoing in Louisiana, with Calcasieu Parish as a potential location, leveraging the region’s suitable geology for carbon storage.

• The project will utilize renewable energy-powered technologies for CO2 removal and secure storage underground.

   

DOE offers Holtec $1.5 billion loan to restart Michigan nuclear plant

• The U.S. Department of Energy (DOE) has offered Holtec International a $1.52 billion loan to restart an 800MW nuclear power plant in Michigan, closed in 2022.

• This loan, contingent on meeting various conditions, is part of the Inflation Reduction Act of 2022.

• Restarting the Palisades plant could prevent 4.47 million tons of CO2 emissions yearly, totaling 111 million tons over its expected 25-year life.

• Holtec plans to construct its first two small modular reactor (SMR) units at the site, separate from the loan-funded project.

• Holtec purchased the plant from Entergy in 2022 for decommissioning, then explored restarting it.

• The company has secured long-term Power Purchase Agreements (PPAs) with Wolverine Power Cooperative and Hoosier Energy in Michigan, Illinois, and Indiana.

• Holtec is seeking to renew the operating license for the Palisades plant with the Nuclear Regulatory Commission.

This was rumored earlier this year. Glad to see the support for nuclear – we’re going to need it.

Walmart signs 15 year solar deal with EDP Renewables

• EDP Renewables North America (EDPR NA) and Walmart signed a 15-year Power Purchase Agreement (PPA) for a new 180 MWac solar project in Texas.

• Walmart will offtake 162 MWac, adding to its existing procurement of 233 MWac from EDPR NA’s utility-scale solar and wind energy projects, and 36 MWac of distributed solar.

• The project will annually power over 27,000 homes in Texas and is expected to generate $42 million in payments to local governments, benefiting public services and infrastructure.

• This agreement is part of Walmart’s larger goal to enable 10 gigawatts of new clean energy projects by 2030, which includes over 600 renewable energy projects worldwide.

• The collaboration between Walmart and EDPR NA, dating back to 2018, includes utility-scale and distributed generation projects, with the total utility-scale PPA procurement now at 395 MW.

• EDPR NA is a leading renewable energy developer in Texas, with over 1.2 GW of installed capacity, and is planning further developments in the state.

US approves Orsted’s Sunrise Wind offshore wind farm

• The Administration approved Orsted and Eversource’s Sunrise Wind offshore wind farm, set to power over 320,000 homes in New York.

• This approval follows Orsted’s warning of potential project failure due to rising equipment and financing costs.

• Orsted and Eversource will commence onshore construction, aligning with their final investment decision.

• Sunrise Wind is the seventh offshore wind project approved under President Biden’s administration, contributing to a 30 gigawatt offshore wind capacity target by 2030.

• The project, slated to be the largest offshore wind facility in the U.S. upon completion in 2026, recently secured a conditional contract from New York state.

• The Bureau of Ocean Energy Management reduced the number of wind turbines to lessen environmental impacts, particularly on seafloor habitats and Atlantic cod.

• Located near Martha’s Vineyard, Massachusetts, and Montauk, New York, Sunrise Wind’s final terms and a 25-year contract are under negotiation.

• Orsted plans to purchase Eversource’s 50% interest in Sunrise Wind, with Eversource leading onshore construction efforts.

• Orsted faced financial losses in its U.S. offshore wind ventures last year, leading to the cancellation of two projects in New Jersey.

Mitsui makes $30 million investment and offtake deal with Atlas Lithium

• Mitsui & Co will invest $30 million for a 12% stake in U.S.-based Atlas Lithium, entering Brazil’s lithium mining sector.

• The investment in Atlas Lithium follows a similar move by Mitsubishi Corp in the lithium industry.

• Mitsui will acquire rights to offtake lithium spodumene concentrate from Atlas’s Neves project in Minas Gerais, Brazil.

• The Neves project, set to start production in Q4 2024, aims to produce 300,000 metric tons of spodumene annually by late 2025, sufficient for about 1 million EVs.

• Mitsui’s offtake agreement with Atlas covers 315,000 tons of concentrate over approximately 5 years.

• The investment is part of Mitsui’s strategy to develop a battery material value chain, including development, production, and recycling.

• Mitsui plans to expand its lithium portfolio and invest in other battery minerals like nickel and manganese.

• S2G Ventures Announces Bala Nagarajan as Managing Director of Energy Investment Team

• ZeoDAC Launches Innovative Carbon Capture Technology

• Drax announces carbon removals deal with Karbon-X

• Latest Sunya Stories podcast with Steve Trauber

• Sunya Stories podcast with Chesapeake’s Jim Grant

• Tuesday’s edition – The Silicon Valley of Energy

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.