Editors Note: This article was originally published in the Sept. 20, 2023 issue of the Chronicle Progress. Some information may be outdated.
The world’s sixth most valuable oil and gas company announced last week it had bought out Magnum Development, LLC, from Haddington Ventures.
Chevron USA, Inc., made the acquisition through its Chevron New Energies division. Magnum Development owns a majority stake in ACES Delta, the joint venture between Magnum and Mitsubishi Power Americas, Inc.
ACES’ Advanced Clean Energy Storage project is a project using electrolysis to create green hydrogen using renewable electricity, with plans to store utility-scale quantities of green hydrogen within natural salt caverns sitting about 1,000 feet below the surface near the Intermountain Power Project (IPP). IPP’s current coal-fired plant is being replaced with a natural gas and green hydrogen plant now under construction. It is scheduled to commence operations in 2025.
“As we continue to pursue lower carbon energy solutions, we are excited to move forward with the Advanced Clean Energy Storage hydrogen project, through our acquisition of Magnum Development and partnership with Mitsubishi Power, to build on Chevron’s 75-year history in Utah,” said Austin Knight, vice president, Hydrogen, Chevron New Energies, in a press release. “We seek to leverage the unique strengths of each partner to develop a large-scale, hydrogen platform that provides affordable, reliable, ever-cleaner energy and helps our customers achieve their lower carbon goals.”
Chevron New Energies is strategically working to reduce carbon emissions through green hydrogen production within the transportation, power, and industrial sectors “where greenhouse gas emissions are hard to abate,” the company stated.
“Reaching this milestone in the development of our hydrogen project will not only have significant benefits to the western U.S. population, but it will also serve as a blueprint for future hydrogen opportunities,” said Michael Ducker, senior vice president of Hydrogen Infrastructure for Mitsubishi Power. “With Chevron New Energies’ involvement, we expect to expand hydrogen supply more quickly. Together, we are investing in the future of hydrogen, helping to create a viable, cost-competitive market for emerging lower carbon solutions.”
The Delta area is on track to serve the Western U.S. as a new hydrogen hub, a vision being pursued and funded by various Biden Administration efforts.
Gov. Spencer Cox said Chevron’s announcement shows Utah is a place where industry is confident it can pursue innovations in new green energy technologies.
“People look to Utah as the place where we work together to find solutions addressing today’s biggest challenges,” the governor said. “This announcement demonstrates that our state has fostered a landscape where clean energy innovation is possible.”
Recently, Magnum Development revealed to Millard County officials plans for additional salt caverns and green hydrogen storage components to ACES that could see a dozen or more such units completed within the next decade or more.
“I look forward to this partnership with Chevron in the ACES Delta mission. Chevron will add tremendous strategic value as we develop a hydrogen production and storage facility,” said Craig Broussard, president, CEO and board chairman of Magnum Development.
Terms of the buyout deal between Chevron and Haddington were not disclosed. Chevron purchased 100 percent of Magnum Development equity.
Citigroup Global Markets, Inc. served as financial advisor to Chevron. Jefferies LLC served as financial advisor to Haddington.
Chevron had previously examined an equity deal with Magnum a few years ago but backed out. Recently, a Chevron corporate vice president was seen attending Intermountain Power Agency board meetings, possibly signaling over the summer that Chevron was renewing
