Blackstone bets another billion

LITHIUM

The Direct Lithium Extraction (DLE) race

• The direct lithium extraction (DLE) sector is reshaping global lithium production, challenging traditional methods such as evaporation ponds and open-pit mines.

• Key players in the global DLE space include Livent, Sunresin, Eramet, International Battery Metals, EnergySource Minerals, EnergyX, Rio Tinto, Albemarle, SQM, Compass Minerals International, Standard Lithium, Lilac Solutions, Summit Nanotech, E3 Lithium, IBC Advanced Technologies, Controlled Thermal Resources, Occidental Petroleum, Vulcan Energy Resources, and Berkshire Hathaway.

• Some companies blend evaporation ponds with DLE technology, while others focus on pure-play DLE projects.

• Major automakers like Ford, General Motors, and BMW have invested in or partnered with DLE companies.

• DLE projects are being developed in various countries, including Argentina, China, the United States, Germany, and Canada.

• The timeline for commercial production varies across companies, with some aiming for production in 2025 and others targeting 2026+

• These DLE technologies offer the potential for more efficient and sustainable lithium extraction for electric vehicle battery production.

LOW-CARBON FUELS

Engie bets on Korean decarbonization

• Engie, a French energy company, has been awarded a land parcel in Oman to build an integrated renewable ammonia plant and export 1.2 million tons of green fuel to South Korea by the mid-2030s.

• The $7 billion project involves a consortium including Posco (steelmaker), South Korean power companies, Samsung Engineering, and a subsidiary of Thailand's national oil company PTTEP.

• The project includes five gigawatts of wind and solar energy, batteries, an electrolyzer producing 200k tons of hydrogen annually, and hydrogen pipelines to an ammonia production plant near Duqm.

• The green ammonia will be shipped to Asian buyers, primarily for decarbonizing South Korean steel production.

• Engie already has consortium partners in Korea lined up as offtakers.

• Oman is considered an ideal location with its export-friendly location, political support for energy projects, and ample wind and solar resources.

• Feasibility studies will be conducted, with a final investment decision expected by 2027. The site aims to be operational by 2030, with the first cargo of green ammonia scheduled for the mid-2030s.

• Other oil majors like Shell and BP have also announced hydrogen projects in Oman.

NATURAL GAS AND LNG

Qatar strikes another long-term LNG deal with China

• Qatar secures second 27-year gas supply deal with China, emphasizing Asia's lead in securing gas supplies from Qatar's expansion project.

• China National Petroleum Corporation (CNPC) signs the agreement to purchase 4 million metric tons of LNG annually from Qatar.

• CNPC also takes a 5% equity stake in Qatar's North Field LNG project's eastern expansion.

• QatarEnergy previously signed a similar deal with China's Sinopec in November for 4 million metric tons per year.

• Asia has surpassed Europe in securing long-term gas supply agreements from Qatar's expansion plan.

• QatarEnergy plans to supply LNG to other Asian buyers and is in talks for additional equity stakes in the expansion.

• Qatar remains the top LNG exporter globally, and demand for LNG has increased due to geopolitical factors.

• QatarEnergy plans to retain a 75% stake in the North Field expansion, with equity partnerships with international oil companies.

• Chinese national energy firms view Qatar as a safer investment amid strained ties with the US and Australia.

Cheniere signs 15 year LNG agreement with Equinor

• Cheniere has signed a long-term LNG sale and purchase agreement with Equinor

• Equinor will purchase approximately 1.75 million tonnes per annum (mtpa) of LNG from Cheniere Marketing on an FOB basis, with the purchase price indexed to the Henry Hub price.

• Delivery of half of the volume will begin in 2027, while the remaining half is subject to a positive Final Investment Decision for the first train of the Sabine Pass Liquefaction Expansion Project.

• The SPA has a term of 15 years from the commencement of delivery of the full 1.75 mtpa of LNG volumes.

• The agreement strengthens the relationship between Cheniere and Equinor and supports the development of the Sabine Pass Liquefaction Expansion Project.

• The SPL Expansion Project aims to include up to three natural gas liquefaction trains with a total production capacity of approximately 20 mtpa of LNG.

• Cheniere has entered the pre-filing review process for the SPL Expansion Project with FERC

CARBON MARKETS

BCG agrees to buy 40,000 tons of DAC carbon removal credits

• Boston Consulting Group (BCG) and CarbonCapture Inc. announce a 5-year purchase agreement for 40,000 tons of DAC carbon removal credits.

• The agreement supports BCG's goal of achieving net-zero climate impact by 2030.

• This is the second-largest publicly announced global direct air capture (DAC) offtake deal by volume and the largest in the professional services industry.

• BCG plans to support CarbonCapture's business strategy through its management consulting services.

• CarbonCapture's technology platform offers modular hardware and an open architecture for optimizing sorbents in different climates.

• CarbonCapture is developing Project Bison, a large DAC facility in Wyoming, aiming to capture and store five million tons of atmospheric carbon dioxide per year by 2030.

• BCG's chief sustainability officer emphasizes the importance of carbon dioxide removal in achieving global net-zero emissions and the need for early investment and long-term corporate commitments.

• The partnership aims to drive innovation, scaling, and cost reduction in the DAC sector and other pioneering carbon removal technologies.

ADNOC to set up a carbon trading desk

• Abu Dhabi National Oil Co. (Adnoc), the largest oil producer in the UAE, is setting up a carbon trading desk to trade carbon credits.

• Adnoc intends to create carbon credits from its own emissions reduction projects and those of other industries in the country.

• The credits will be available to offset potential carbon taxes on exported products that contribute to emissions.

• Gulf oil producers, including the UAE and Saudi Arabia, are establishing carbon trading markets to transition to greener economies.

• The new carbon desk is part of Adnoc Trading and will be headed by Aleksi Parkkila, who joined the company from Trafigura Group.

• Businesses can offset their carbon emissions by purchasing credits linked to projects that reduce or avoid planet-warming emissions.

• The UAE will host the United Nations' COP28 climate change talks in November, indicating its commitment to reducing fossil fuels while investing in oil and gas production.

RENEWABLES

Blackstone can’t get enough Invenergy - invests another $1 billion into the renewables platform

• Invenergy announces an approximately $1 billion equity investment from Blackstone Infrastructure Partners to support its expanding renewable energy business.

• This investment adds to Blackstone's previous investments totaling nearly $3 billion in Invenergy in 2021 and 2022.

• Invenergy's ownership includes Blackstone, CDPQ, and Invenergy management, with the management team remaining responsible for day-to-day operations.

• The additional capital will accelerate the execution of Invenergy's existing project portfolio and new business initiatives.

• Invenergy is a leading developer, owner, and operator of clean energy projects, including solar and wind farms, energy storage facilities, offshore wind projects, transmission lines, clean hydrogen initiatives, solar panel manufacturing, and community solar.

• The investment will support Invenergy's growth in the United States and globally.

Xcel Energy announces they are majority carbon-free

• Xcel Energy announces that more than 50% of the power it generates across the eight states it serves comes from carbon-free sources, exceeding the national average.

• The company has reduced carbon emissions associated with electricity provided to customers by 53% from 2005 levels.

• Xcel Energy aims to provide customers with 100% carbon-free electricity by 2050 and reduce carbon emissions from its operations by 80% from 2005 levels by 2030.

• The company is implementing energy plans in Colorado and the Upper Midwest to meet its 2030 goals and plans to exit coal operations at Tolk Generating Station in Texas by the end of 2030.

• Xcel Energy is investing in emerging technologies such as long-duration battery storage and clean hydrogen production to support grid reliability during the clean energy transition.

• The company has reduced water consumption from energy generation by 39% and air emissions from power plants by about 80% since 2005.

• Xcel Energy provides reliable and affordable energy, outperforming industry reliability standards and maintaining average residential electric bills 20% lower than the national average.

TWEET OF THE WEEK

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.