SLB's $400 million Aker Carbon bet

PLUS: Project Cypress DAC hub, DOE's $1.5 bn nuclear loan, Walmart's solar project, Sunrise offshore wind, Mitsui's Atlas Lithium investment

Good Morning. This is the Sunya Scoop. The newsletter that takes energy transition news and turns it into an easy-to-read email for you.

Here’s what we have for you today:

  • 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, 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.

  • 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.

  • 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.

  • 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 & 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.

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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.

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