Vertically-integrated volumes

South Dakota passes three bills to help facilitate CCS pipeline projects

• South Dakota legislature passed a package of bills, known as the “Landowner Bill of Rights,” to facilitate carbon capture and sequestration (CCS) pipeline projects.

• Three bills were passed: Senate Bill 201, House Bill 1185, and House Bill 1186.

• The bills set guidelines and statutes of limitations on easement agreements for carbon capture projects in South Dakota.

• The South Dakota Farm Bureau and state corn growers and soybean associations praised the bills for delivering landowner protections, property tax relief, and preserving local zoning.

• Senate Bill 201 collects payments from CO2 pipeline companies at the county level for property tax relief.

• HB 1185 establishes processes for landowners to be informed and compensated for access by companies for surveying and siting.

• HB 1186 sets easement standards for CO2 pipeline planning projects in South Dakota.

• Guidelines include minimum pipeline depth, repair policy for drain tile damage, liability protection, indemnification of landowners, and more.

• Summit Carbon Solutions is the remaining CCS company with plans to construct a major pipeline through South Dakota, expressing gratitude for the passage of the bills.

• Iowa Renewable Fuels Association sees the bills as providing an equitable path forward for carbon capture projects.

Climeworks partners with airlines SWISS and Lufthansa on carbon removal

• SWISS and Lufthansa Group partner with Climeworks for long-term carbon removal agreement.

• The partnership aims to scale up carbon removal efforts to combat global warming and ensure sustainable aviation.

• SWISS plans to neutralize hard-to-abate emissions and offer customers the chance to contribute to carbon removal.

• The agreement extends until 2030 with options for future collaboration and additional carbon removal purchases.

• Direct air capture is seen as crucial for achieving global net zero emissions by 2050.

• SWISS is already using sustainable aviation fuel and plans to include Climeworks’ carbon removal service in its sustainability offerings.

  
  

EQT acquires formerly-controlled Equitrains forming vertically integrated nat gas company

• EQT announces acquisition of Equitrans Midstream for $5.5 billion (all-stock), forming a vertically integrated natural gas company

• All-stock transaction with combined enterprise value surpassing $35 billion

• Acquisition provides over 2,000 miles of pipeline infrastructure, aligning with EQT’s core operations

• Expected reduction in EQT’s long-term corporate free cash flow breakeven to less than $2 per MMBtu

• Anticipated annual synergies of $250 million, with potential upside to over $425 million

• Transaction creates America’s first large-scale integrated natural gas producer, offering low-cost structure and exposure to natural gas prices

• EQT to own approximately 74% of the combined company, Equitrans shareholders to own approximately 26%

Consolidation continues. upstream-upstream, midstream-midstream and now upstream-midstream. Am reminded of this quote:

DOE allocates $425 million to decarbonize in former coal communities

• The Administration allocates $425 million to decarbonize and manufacture clean energy products in former coal communities.

• The funding, part of the Investing in America agenda, aims to create good-paying manufacturing jobs, build clean energy supply chains, and reduce industrial emissions.

• Managed by the Office of Manufacturing and Energy Supply Chains (MESC), the Advanced Manufacturing and Recycling Grant Program supports small and medium-sized manufacturers in current and former coal communities.

• This initiative, funded by the Bipartisan Infrastructure Law (BIL), builds on previous successful investments in 2023.

• The program prioritizes two investment themes: Clean Energy Manufacturing and Recycling, and Industrial Decarbonization.

• Projects must occur in communities affected by coal mine or coal-fired power plant closures since specific dates.

Partners considers sale of German renewables firm VSB

• Partners Group is considering options, including a potential sale, for German renewable energy company VSB Group.

• Financial advisers have been interviewed, and the sale process could commence in the second quarter.

• The potential sale could value VSB at up to $2 billion including debt, according to sources.

• Interest in the renewable energy sector remains high despite a recent drop in asset values, driven by EU renewable energy targets.

• VSB is likely to attract interest from infrastructure funds and utilities if a sale proceeds.

• Encavis AG recently announced talks with KKR regarding a potential transaction.

• Partners Group initially invested in VSB in 2020, and the company operates in multiple countries.

• Partners Group decided to sell VSB instead of merging it with Exus, another renewables firm it acquired in October.

EQT Group and Temasek explore sale of Indian renewables platform, O2 Power

• Investment firms EQT AB and Temasek are selling their Indian renewables venture, O2 Power.

• They’ve enlisted Barclays to handle the auction for O2 Power.

• O2 Power was established in 2020 to deploy over 4 GW of renewable power capacity.

• It could be valued at USD 2.5 billion to USD 3 billion, considering its complete project pipeline.

• Currently, O2 Power has 1.8 GW of operational solar and wind assets, expected to reach 2 GW soon.

• Global infrastructure funds and energy companies might show interest in acquiring O2 Power.

EDP and Rondo Energy team up on heat batteries

• EDP and Rondo Energy form partnership for industrial heat decarbonization

• Aim to provide renewable energy-powered heat to European industries

• EDP to develop 400 MW of wind and solar projects to power 2 GWh of Rondo Heat Battery installations

• Rondo Heat Batteries convert intermittent electric power into continuous high-temperature heat

• Joint solution offers 24/7 renewable heat and power supply contracts

• Rondo’s technology enables deep industrial decarbonization and grid stabilization

• EDP, with 16 GWs of wind and solar deployed globally, pledges to be 100% green by 2030

• Cooperation began through EDP’s Free Electrons cleantech engagement program

• Partnership addresses the 15% of world CO2 emissions from industrial heat

• Repowering industrial heat with renewables presents a 7TW opportunity and can cut GHG emissions by 20%

• Trace Carbon Solutions Submits Class VI Permit Application for Two CO2 Injection Wells to Serve Emission Sources Along the Gulf Coast

• NiSource targets increasing use of RNG as part of sustainability commitment

• Major European energy companies ask US regulators to deny Venture Global LNG’s permit extension
  

• Latest Sunya Stories podcast with Steve Trauber

• Sunya Stories podcast with Chesapeake’s Jim Grant

• Last Thursday’s edition – SEC splits 3-2

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.