DAC in Dubai

CARBON CAPTURE

CRC provides update on carbon capture business

• California Resources Corporation (CRC)‘s Carbon TerraVault (CTV) announces a storage-only Carbon Dioxide Management Agreement (CDMA) with Verde Clean Fuels Inc. (Verde).

• The CDMA commits Verde to sequester a minimum of 100 thousand metric tons per annum (KMTPA) of CO2 at the CTV I carbon storage vault in California.

• CTV more than doubles the expected sequestration volume of its Lone Cypress blue hydrogen project to 205 KMTPA of associated CO2 to be permanently sequestered at CTV I reservoir.

• CTV's total projected CO2 injection rate under CDMAs reaches 815 KMTPA, targeting 405 KMTPA in the San Joaquin Basin and 410 KMTPA in the Sacramento basin.

• CTV submits a 17 million metric tons (MMT) Class VI permit to the U.S. EPA for CTV V CO2 reservoir, bringing the total projected storage capacity with Class VI permits submitted to the EPA to 191 MMT.

• The CDMA with Verde involves the construction of a renewable gasoline plant at CRC’s Net Zero Industrial Park at Elk Hills, California, expected to produce 21,000 gallons per day of renewable gasoline from biomass and agricultural waste feedstock.

• Project Final Investment Decision (FID) for the Verde facility is targeted for 2025, with operations expected to begin in 2027. CTV JV will provide in-field transportation and a permanent CO2 sequestration site at CTV I.

Oxy and ADNOC to explore DAC hubs in US and UAE

• Oxy and ADNOC will evaluate investment opportunities in Direct Air Capture (DAC) facilities and CO2 sequestration hubs in the United States and the United Arab Emirates (UAE) to accelerate net-zero goals.

• The strategic collaboration aims to deploy carbon capture, utilization, and sequestration technology at scale to help industries achieve their net-zero targets and purchase carbon dioxide removal credits.

• ADNOC may participate in DAC plants and CO2 sequestration hubs in the US developed by Occidental's subsidiary, 1PointFive, and jointly develop UAE-located CO2 sequestration hubs with Occidental.

• Feasibility studies for a 1 million tonne-per-year DAC plant in the UAE are also being considered to provide emissions reduction solutions for carbon-intensive industries in the region.

• The collaboration will explore opportunities to incorporate CO2-based technologies, including emissions-free power and sustainable fuels in the UAE.

• The agreement is enabled by the UAE-U.S. Partnership for Accelerating Clean Energy (PACE), which aims to mobilize $100 billion in clean energy and carbon management projects by 2035.

NATURAL GAS AND LNG

BP and OMV sign LNG agreement

• BP and OMV signed a 10-year LNG supply agreement.

• The agreement covers the supply of up to 1 million tonnes of LNG per year from 2026.

• BP will provide OMV with LNG from its global portfolio, received and re-gasified through the Gate LNG terminal in Rotterdam or other European terminals.

• The agreement contributes to OMV's diversification of supply sources and supports the security of supply to customers in Austria and Europe.

• This partnership with OMV is an important strategic step for both companies towards long-term supply diversification and energy transition.

• BP considers LNG as an essential part of the energy transition and their own pivot to becoming an integrated energy company.

• The agreement further demonstrates BP's LNG supply capability in Europe, supporting security of supply for their European customers.

Venture Global’s CP2 project in Louisiana gets FERC environmental approval

• Venture Global LNG's Calcasieu Pass 2 (CP2) project in Louisiana receives final U.S. Federal Energy Regulatory Commission's (FERC) environmental approval.

• CP2 is the first U.S. liquefied natural gas (LNG) project in 2023 to receive a final investment decision for expanding the natural gas liquefaction facility.

• FERC states that the potential impacts of the project would not significantly affect local resources and has developed specific mitigation measures for construction and operation.

• The project would increase greenhouse gases' atmospheric concentration, but FERC does not classify it as "significant or insignificant" and recommends measures to reduce its effects.

• Venture Global expects a commission vote and construction to begin later this year.

• About 9.25 million tonnes per annum (mtpa) of CP2's 20 mtpa capacity have been sold under 20-year sales and purchase agreements, with ongoing discussions for the remaining capacity.

• CP2's LNG customers include Exxon, Chevron, and Japan's top LNG buyer JERA, among others.

RENEWABLES

Capital Energy to sell $1 billion renewable portfolio

• Capital Energy is selling a renewable energy portfolio worth up to $1 billion.

• The portfolio consists of 4.3 gigawatts (GW) of onshore wind and solar power plants in Spain.

• The sale includes 48 projects ready to start construction within 15 months (1.6 GW), 0.7 GW of solar PV potential, and 2 GW of early-stage wind assets.

• Bidders can offer to buy projects closer to completion, less developed assets, or both.

• Spain aims to increase wind generation capacity to 62 GW, photovoltaic solar generation capacity to around 76 GW, and power storage capacity to 22 GW.

• The sale includes a team of 45 employees from Capital Energy.

• Capital Energy currently employs 355 people and holds a renewable portfolio of 25 GW, with 10 GW in advanced development.

• Bids expected this fall.

FT piece on cable shortage for energy transition

• The clean energy transition has led to a surge in demand for long-distance electricity cables, known as interconnectors, and other energy infrastructure like wind turbines.

• The shift away from fossil fuels and the increase in offshore wind projects have contributed to the need for extensive cabling to transmit electricity over longer distances.

• The high demand is causing delays in projects due to challenges in acquiring supplies of electricity cable and converter stations needed for grid connections.

• The supply chain for electricity cables is concentrated among a few companies, and there are concerns about shortages and cost increases in the future.

• High-voltage direct current (HVDC) systems are being used for subsea cables, but producing them is a complex process, and transportation is also challenging.

• The surge in demand has led to rising costs, longer lead times, and concerns about copper shortages for cable production.

• Grid operators in both Europe and the US are facing difficulties getting equipment, and manufacturers are cautious about investing in additional capacity without planning certainty.

• The market is starting to adapt, with plans for new HVDC factories to meet the growing demand for interconnectors and other energy infrastructure.

• However, competition is fierce, and developers need to be determined and financially prepared to navigate the global market for energy infrastructure.

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.