Parradee Kietsirikul
Aker Carbon Capture (OTCQX: AKCCF) is the only natural carbon capture company. It spun off from Aker Solutions in 2021 and only has a market cap of around $700 million. Large-scale tests already in 2012 at the Mongstad Technology Center in Norway. Aker’s generation is similar to Shell’s CANSOLV generation (SHEL) in that it uses an amine to capture CO2.
Simplified Process Flowchart of a Generic Amine Process (author)
A top-level flow diagram of the amine formula is presented here. These formulas use amino chemicals that dissolve in water. A fuel containing CO2 enters an absorption tower where the fuel comes into contact with the addition of water and amine. Dissolved amines are chemically bound to CO2. The water-amine-CO2 aggregate is pumped into another tower, called an extraction unit, which heats the aggregate until the chemical bond between the amine and CO2 is broken and the CO2 is released as fuel. CO2 leaves this unit with a little water vapor and a very small amount of amine. The added regenerated water-amine is then able to cool and be placed in the absorption unit and capture more CO2. The combustible CO2 will have to be compressed to maximum stress before being put into a pipeline for transport.
Absorption-based technologies use steam to provide the heat needed to break the CO2-amine bond, so that CO2 can be released. Most of the time, the force used to carry out an amine procedure comes in the form of vapor that can be used a different way of performing paints such as force generation. This steam is almost supplied through some kind of combustion.
Solvent Aker is the 8 years of R
Big engineering projects like carbon capture plants take time to secure. Projects follow the steps outlined here.
Steps for Carbon Capture Engineering Projects (author)
The end-user interested in purchasing a capture unit sends a data request to any person interested in proceeding with the transfer. Government entities submit a request for proposal or announcements of investment opportunities. Companies simply send an initial request for data or request a high-level offering from generation providers they know and trust. The end user selects from the bids won and then quotes one or more feasibility studies conducted through the generation developers. A feasibility examination establishes whether the allocation is technically feasible and economically justifiable.
The next step is a FEED study, short for engineering and front finish design. The generation provider plays a much deeper design of the proposed plants, adding simulations, designs, drawings, threat analysis and operability, environmental effects in the studies. , control diagrams, electrical diagrams, piping and instrumentation diagrams, etc. Again, this step is funded through the end user. This phase is regularly followed through a final investment resolution during which the end user decides whether to proceed with detailed engineering. , procurement and construction.
My purpose is not only how those allocations are going, but also to highlight that the profit is actually generated for the generation provider in the last 3 stages of the allocation. While it is true that most of the profit comes from the last step, any smart engineering company will also have positive margins in the feasibility examination and FEED parts of the process. A total allocation charge of $5 million to $10 million.
As a company focused one hundred percent on carbon capture, Aker Carbon Capture has also developed attractive niche marketing and marketing strategies. They have created a small-scale portable formula that they can hire to provide on-site testing to potential customers. They also have an exclusive technique for the small and medium-scale advertising market. Aker has developed modular formulas that can be purchased or used for carbon capture as a service.
The merit of introducing a mobile test unit is that it allows consumers to see Aker generation in action in their exhaust fuels before making a decision on whether to pay for a test or sign a contract. Aker has created a miniature edition of its submission process. boxes that can be transported to verification sites to verify the procedure in a fast-burning fuel. The resolution to build a large-scale carbon capture plant represents burdens of millions or billions of dollars in capital. Be assured that the Aker generation has been verified. Its factory, although on a very small scale, provides peace of mind to consumers. This is the case for new programs in which the fuel is composed of waste and pollutants that can lead to accelerated degradation of the chemical amine. As noted in my previous article on Shell’s CANSOLV, this was one of the main reasons for the poor functionality of their system in Boundary Dam.
Aker Carbon Capture
Aker has adopted another technique to promote its carbon capture systems. On a large scale, more than 400,000 tons per year (TPA), will offer their “Big Catch” system, an exclusive and completely customized solution for the plant of origin. This is the same technique used by maximum carbon capture plants. However, for smaller-scale applications, they have developed a modular “Just Catch” system. They have two pre-built systems, one that can capture 40,000 TPA and another that can capture 100,000 TPA.
Note that the same workflow as above for the construction of a carbon capture plant, the end user will pay for a feasibility examination and a FEED examination. FEED studies can be especially expensive, as noted above. 400,000 TPA, the rate of the FEED test is proportionally much higher than a cement kiln or a large-scale power plant. Having a pre-designed formula and being able to use it becomes a hot option as it eliminates much of the burden of feasibility studies and FEED.
Aker Carbon Capture Deals
They will also offer “Just Catch Offshore”, a modular formula designed to capture CO2 from offshore oil rigs and floating production and offloading units. that is, it is willing to remove its CO2.
Aker has another very exclusive offer. Last year, they submitted an offer that would allow end users to pay based on captured CO2 to finance the plant structure and own the plant themselves. Using its modular plants, Aker would be installed at the CO2 source and take care of the entire project, adding initial financing, structure, constant flow, liquefaction, transportation and storage. The end user would agree to pay a constant or variable charge consistent with the ton of CO2. Aker owns and maintains the plant and ensures a recurring gain flow. This is a new technique that has not yet been tested. It has the potential to fail if its leveled load consistent with the ton of CO2 is more consistent than expected. However, the creativity and exclusive structuring of their offerings provide benefits for small and medium-sized issuers.
Carbon as a Service (Aker carbon)
Aker has yet to have a large-scale assignment like Shell in Boundary Dam or Mitsubishi Heavy Industries (OTCPK: MHVYF) in Petra Nova. That’s about to change. They were chosen in 2020 as the generation supplier for a 400,000 tonne-per-day catchment plant at the Brevik cement plant. Aker presented himself to the festival as a Norwegian company competing for Norwegian capital to work in Norway, but that doesn’t diminish the importance of this assignment. In fact, it also helped that they have performed successful controls in this precise factory with their cellular control unit in the past. If successful, Aker will be the first large-scale carbon capture plant in a commercial cement kiln.
Brevik cement kiln (Wikipedia)
If you’ve read my previous article, you’ll realize that no matter what happens with electric power and renewables, commercial CO2 resources, such as cement plants, are among the most difficult to decarbonize and the most essential. The modern world cannot be built without cement, and for every ton of cement, about six hundred kg of CO2 is emitted. Cement effluents are dirty, laden with debris, and have peak concentrations of pollutants. This is precisely the kind of fuel that typical amine systems struggle to capture without losses of superior amine. If Aker can do this, it would turn out that his amine is actually more physically powerful than the alternatives.
Another key differentiator for this plant will be the integration of heat. Aker designed it to use waste heat from the cement plant and its own compression formulas to drive amine regeneration and CO2 release. If successful, it will be the first advertising absorption formula that does not require steam. If they don’t want to build an auxiliary herbal fuel combustion facility to supply steam, it’s a big win for their technology.
There will be development issues to scale for the first time. However, if they achieve their main goals, it will give other corporations the confidence that they want to book more projects with Aker. The plant is expected to start operations in 2024
Aker has ambitious goals. They must have signed contracts to capture 10 million TPAs by the end of 2025. In addition to the Brevik project, they signed a contract in November 2021 to build a 100,000 TPA facility in the Netherlands at a waste-to-energy plant in the Netherlands. This means that they have won contracts for 5% of their stated target. However, the project portfolio for more projects is developing rapidly. the level of feasibility examination.
Advancing the goal of 10 million TPA in 4Q21 (Aker Carbon Capture)
Six months later, at the end of 2Q22, this figure amounted to 4. 4 million TPA for FEED studies and 8. 5 million TPA for feasibility studies.
Advancing the 2Q22 target of 10 million TPA (Aker Carbon Capture)
There is a super festival in the domain of carbon capture, that is, in the domain of amine absorption. Here are massive players with a deep portfolio (like Shell) that have already reached the scale that Aker still points to. Technologies such as Svante’s forged sorbent capture bed, Chart Industries’ cryogenic carbon capture generation (GTLS) and Air Liquide’s Cryocap generation (OTCPK: AIQUF) (OTCPK: AIQUY) are also emerging. The emerging carbon market is developing and, in fact, there is room for the Aker generation to take a big slice of the pie or even be very successful just to make their own niche. However, a meaningful festival is and will remain a risk.
The Brevik plant is attempting to capture CO2 from a cement kiln on a scale never before achieved. That alone is a daunting task. However, Aker also opted to forego generating steam to run its stripper column, opting instead to integrate with the existing plant and use its waste heat to regenerate its amine. As I explained in my Shell article, one of the main reasons their allocation went over budget at Boundary Dam was due to headaches with steam extraction from the plant’s existing steam cycle. electric. It bears repeating that it caused so many headaches and was so expensive that when the next large-scale carbon capture facility was built at Petra Nova, instead of taking steam or heat from the existing plant, Mitsubishi Heavy Industries built a gas absolutely new herbal. -power plant fired to generate steam to capture unit. Integrating warmth into Aker’s Brevik plant can make or break the good fortune of your assignment. These are dangers to be aware of.
Aker has developed new approaches to plant design, commercialization and diversified offerings. However, they have not yet proven that they can work cost-effectively. At present, they are very unprofitable and have negative lost money and negative profits. Position in relation to debt and money consumption, so bankruptcy is not a risk at this time, however, they will want to continue building their portfolio and secure more contracts to achieve profitability. There are significant incentives and cheap financing for green projects, but it probably wouldn’t help if they can’t get the right unit of economy or if generation fails. , however, scaling has proved complicated for each carbon capture system and, in fact, there will also be development issues for Aker.
As I stated in my first article on carbon capture (read it to learn more about why I chose those criteria), for carbon capture to have an effect on a company’s stock, you’ll need to meet each of those criteria:
Market capitalization: The CO2 market will be worth tens of billions this decade. A company wants a market cap small enough to have a significant impact on profits and profits.
Scale: Technology readiness point of 6 or higher or with a recently funded allocation at this scale
Economic viability with 45Q: Must be able to generate CO2 at $85/ton or less for spot capture, or $180/ton for direct air capture.
Aker’s market capitalization of less than a billion dollars makes it the perfect size to capitalize on the emerging CO2 market. In addition, they reached a TRL of 6 more than a decade ago, and their load estimates show that they are capable of generating CO2 at a load of less than $85/tonne. They are the first corporations that I have tested that meet all 3 criteria.
Aker Carbon Capture is a speculative but high-risk purchase in those grades in its two advertising contracts and portfolio of potential projects in the feasibility grades, pre-FEED and FEED. These studies are paid for through potential end users and ultimately generate revenue. Aker checks all market capitalization, scale and economy boxes if they fit. However, I would like to point out that this is a very speculative acquisition because of the dangers involved. I would only allocate a very small position (<1%) of any portfolio at this time due to the dangers described. If the Brevik plant fails, it will severely damage its reputation and likely weigh down actions. It still wouldn't necessarily be a death sentence for the company, as Shell recovered from the first attempt and won a moment large-scale capture project.
There is also a very high increase. If the effects of the Brevik plant are positive, a multitude of long-term contracts will actually follow, and it is possible that the company and shares will take off. The plant is expected to start operating in 2024, so for those who are more averse to threats, it would make sense to wait and see the effects before starting a change. I’m watching the scenario carefully and while I haven’t started a position yet, I have starting a teaser position based on what I see after their gains next week on November 1st.
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Disclosure: I have/do not hold any stock, options or derivative positions in any of the corporations discussed, and I do not intend to initiate such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I don’t get any refunds for this (other than Seeking Alpha). I don’t have any business dating a company whose shares are discussed in this article.