Tellurian's $1 billion sale

PLUS: EQT carbon offsets, GM's lithium bet, EnCap sale

Author

Sunya Scoop
April 11, 2023

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.

After interrupting for this weekend’s special edition, we are now back to regularly scheduled programming.

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BOURBON MADNESS

Winner of the Sunya Scoop Bourbon Madness 2023 and a bottle of Blanton’s is…

…a Houston-based New Energy Executive

Given the highly coveted nature of the prize causing security and safety risk, the winner will remain anonymous

CARBON MARKETS

  • EQT announces its first nature-based carbon offset initiative

  • Partnership with Wheeling Park Commission, Teralytic (soil analytics company), and Climate Smart Environmental Consulting

  • Forest management projects to generate carbon offsets across 1,000+ acres of forest land at Oglebay and other properties

  • Teralytic's soil probe technology to ensure accurate, transparent quantification of offsets

  • Initiative to support EQT's efforts to reach net-zero Scope 1 and Scope 2 GHG emissions by or before 2025

  • Conservation Practice Standards (CPS) by the U.S. Department of Agriculture's NRCS and alignment to Verra guidelines

  • Advanced soil probe technology to measure project impact on soil health, generating higher quality carbon offsets at lower cost

  • EQT partners with Wheeling Country Day School for educational learning program on soil health

LOW-CARBON FUELS

  • Humble Midstream exits joint venture with Enbridge for an undisclosed amount

  • Joint progress made in engineering and capacity marketing for low-carbon ammonia production and export facility at Enbridge Ingleside Energy Center (EIEC) in Texas

  • Yara Clean Ammonia shows interest in engaging directly with Enbridge to jointly develop the project, enhancing its long-term prospects

  • Utility-scale production facility to supply ultra-low-carbon ammonia for growing global and domestic demand

  • Up to 95% of CO2 generated from production to be sequestered in new carbon capture infrastructure

  • We covered the Yara-Enbridge announcement last week

Between this and the Permian sale, last week was a big one for EnCap!

ENERGY TRANSITION

  • Japan seeks G7 agreement to accelerate decarbonization efforts through collaboration at ministers' meeting on climate, energy, and environment

  • Meeting to be held in Sapporo on April 15-16, with Japan as G7 chair this year

  • Japanese industry minister Yasutoshi Nishimura highlights need for energy security and economic growth alongside decarbonization

  • Nishimura notes importance of LNG and natural gas as transition energy sources; differences exist on length of energy transition period

  • G7 ministers expected to confirm commitment to existing sanctions on Russia and reducing dependence on Russian energy

  • Japan continues to buy Russian gas from Sakhalin-2 project, accounting for 10% of its total imports; no requests to reduce dependence on Russian energy from G7 allies

  • Japan engages in resource diplomacy, seeking to diversify energy supplies and maintaining ties with Middle Eastern countries

LNG

  • Tellurian to sell 800 acres of land in Louisiana for $1 billion to an undisclosed institutional investor

  • Land was designated for the proposed Driftwood LNG terminal facility

  • Company will lease the land back for 40 years at an 8.75% capitalization rate

  • Deal creates a 40-year liability of $87.5 million annually, escalating 3% yearly

  • Driftwood project faced setbacks, including cancellation of some LNG supply deals

  • Project received regulatory approvals in January to begin construction

  • Expected to produce 27.6 million tonnes per annum of LNG when completed

  • Deal contingent on Driftwood LNG LLC securing financing commitments for Phase 1 of the project on satisfactory terms for the buyer

The LNG financing crunch continues…

CARBON CAPTURE

  • Harbour Energy and BP to develop the Viking CCS project in North Sea

  • Harbour Energy will remain the operator with a 60% interest

  • BP will acquire a 40% non-operated share

  • The UK has launched the "Track 2" cluster sequencing process for carbon capture and storage

  • Viking CCS is recognized by the government as one of the leading contenders for the process

  • Final investment decision on the project is expected in 2024, subject to the outcome of the Track 2 CCS.

LITHIUM

  • General Motors (GM) announces an investment in lithium technology start-up EnergyX to secure long-term supplies of the metal for its electric vehicle batteries.

  • EnergyX is one of several companies developing direct lithium extraction technologies (DLE) that can extract lithium from brine deposits that have been largely ignored by the mining industry.

  • GM plans to lead a Series B round of financing for EnergyX worth $50 million and will have the right of first refusal to buy lithium from any projects that EnergyX develops.

  • GM's scientists will work with EnergyX to commercialize the DLE technology, aiming to extract lithium efficiently from brine sources.

  • EnergyX is building five demonstration facilities in Argentina, Chile, California, Arkansas, and Utah to test its technology.

  • The investment follows GM's $650 million investment in Lithium Americas Corp and its investment in Controlled Thermal Resources Ltd.

  • EnergyX plans to launch an initial public offering by 2024.

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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.