US developer New Fortress Energy swivels focus to blue hydrogen

Author: Ruth Liao

2021/05/10

HOUSTON (ICIS)--US energy developer New Fortress Energy announced on 7 May it plans to pivot from developing green hydrogen technologies and instead focus solely on blue ammonia and renewable fuels technologies.

New Fortress Energy, co-founded by billionaire Wes Edens, first launched itself as a developer of small-scale liquefaction in the US, Americas and other emerging markets.

However, in a first-quarter 2021 earnings announcement on 7 May, New Fortress Energy executives said the company intends to launch a joint venture with Fortress Transportation and Infrastructure (FTAI), which is managed by Fortress Investment Group, the same parent company as New Fortress Energy.

NEW FORTRESS PUSHES FOR BLUE HYDROGEN
Edens said during the 7 May earnings presentation that the company had looked at green hydrogen technologies and invested in an Israel-based electrolyzer company but said that “green hydrogen businesses, in my opinion today, are not commercially viable.”

He said that while governments are supportive of green hydrogen, which was promising, New Fortress instead wanted to pursue two initiatives for clean fuels.

New Fortress’ new subsidiary, known as Zero Parks, will focus on developing a renewable fuels and a blue ammonia project that both could make a final investment decision (FID) in the next two to three months, Edens said.

The renewable fuels project would create renewable diesel from repurposed materials such as animal fats, used cooking oil and other biomass, while the other would focus on steam methane reforming (SMR) and carbon capture to create blue hydrogen, instead of using renewable power to create green hydrogen.

The site of the projects is FTAI’s terminal in Beaumont, Texas. Capital expenditure is estimated between $200m and $300m. Each have a two-year development timeline.

“For both of the projects, the technology is well known and readily available. As it’s the feedstock, we’re now focused on securing the offtake for the projects, which we expect to do in the coming months,” said Ken Nicholson, a managing director of Fortress Investment Group leading Zero Parks.

HYDROGEN FOR SHIPPING

On the call, Nicholson said New Fortress believed the biggest customer base for blue ammonia would come from the shipping market.

“Over the next 20-30 years, the transition will be to over half their fuel needs, at least by the IMO standards being implemented,” Nicholson said.

New Fortress Energy made a bold stake into regasification with the acquisition of Golar LNG, which closed in April 2021, and has rapidly also pursued a floating liquefaction development scheme known as Fast LNG.