BP-Backed Skyonic Poised for Carbon Capture Funds on Shale Boom
Skyonic Corp., a carbon-capture technology developer with investors including BP Plc (BP/) and ConocoPhillips (COP), is about to obtain about $119 million to fund its first commercial project, at a Texas cement plant.
The sum, $80 million in loans and $39 million in equity, will support construction of Skyonic’s $125 million venture to gather 75,000 metric tons of carbon dioxide emissions a year from Capitol Aggregates Inc.’s cement plant in San Antonio, Skyonic Chief Executive Officer Joe Jones said in an interview in London. The Austin-based company declined to give further details ahead of a signing for the funds.
Skyonic plans to profit from global efforts to curb CO2 emissions using technology to trap and “mineralize” the gas into chemical byproducts to sell. Countries such as the U.K. and U.S. are promoting methods of capturing pollution from factories and power plants for underground storage or refining into products. Carbon capture and storage is yet to operate with power generation on a commercial scale.
“Our process produces hydrochloric acid, which is very important because it feeds the shale rush,” Jones said.
The acid is pumped into the ground in so-called hydraulic fracturing, or fracking, to break apart shale formations and unlock gas deposits. The fracking boom in the U.S. and Canada has increased demand for the acid, doubling prices, Jones said.
Skyonic’s process also produces sodium bicarbonate or baking soda that it will initially sell to the animal-feed market. Skyonic has 10-year offtake agreements in place for its products, Jones said.
Skyonic’s SkyMine technology will curb CO2 emissions from the Capitol plant by about 15 percent by treating a portion of the facility’s flue gas, he said. The process can remove more than 90 percent of emissions from the gas it treats and Skyonic has tested it at three pilot facilities.
The company already received $9 million from investors including Northwater Capital Management Inc., ConocoPhillips and BP for the plant, as well as $28 million in grants from the U.S. Department of Energy. The facility will be in full production by the end of 2014.
The company is in discussions with groups in Canada, Russia and a Chinese steel company over potential partnerships for the technology, which also eliminates sulfur dioxide and nitrogen oxide, causes of acid rain, from burning fossil fuels.
Skyonic is developing a further version of the process called SkyCycle that reduces the energy expended to carry out the process, known as the energy penalty.
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