Abraxas Power Corp. is making steady progress on its ambitious Exploits Valley Renewable Energy Corporation (EVREC) green hydrogen and ammonia plant in central Newfoundland and Labrador.

A renewable energy developer headquartered in Toronto, Abraxas Power recently signed a 30-year lease with Exploits Marine and Logistics Inc. and Exploits Valley Port Corporation for use of the Port of Botwood. It will primarily be used to deliver green hydrogen and ammonia to European markets.

"This agreement marks another major milestone in the development of our project and is a pivotal step towards building out the key infrastructure as the project continues through the development phase," Dean Comand, president and COO of Abraxas Power, said in a release. 

The leasing of the Port of Botwood comes on the heels of Abraxas Power's June announcement that it awarded an Early Contractor Involvement (ECI) agreement to McDermott, a Houston-based tier-one global engineering firm, to carry out preliminary planning and engineering work on the EVREC facility. 

The EVREC project as currently envisioned by Abraxas encompasses a wind farm with a maximum of 530 turbine installations with the ability to generate 3.5 gigawatts of electricity. The production plant will boast a capacity to produce 165 kilotonnes per annum of green hydrogen and 5,000 tonnes per day of ammonia.

The EVREC plant will produce green hydrogen and ammonia primarily for the export market. Green hydrogen will be used as a feedstock to produce ammonia through a process entirely powered by renewable electricity, according to its website.

Abraxas Power is now in the process of raising the estimated $12 billion required to see the green hydrogen plant to completion by the end of this decade. Two-thirds of the funding will be raised via debt issuance and the remaining third via equity. The financial structure will also be supported by investment tax credits from the Canadian government.

Project relies on wind power conditions, shipping lane proximity 

The EVREC project is the brainchild of Abraxas co-founder and CEO Colter Eadie, who recognized the opportunities inherent in building the plant in Newfoundland and Labrador to take advantage of significant potential for exporting green hydrogen and ammonia to Europe.

He and Abraxas chairman and co-founder Ravi Sood both believed the Maritime province was an ideal location due to optimal conditions for wind power farms and proximity to shipping lanes.

"The vision was not some sort of tree hugger fantasy, but a legitimate economic assessment that the European market for green hydrogen and ammonia was expanding" Sood said in an interview with Sustainable Biz Canada.

"We narrowed down a set of possible sites, putting all the logistical and economic ingredients into the blender, and all the arrows kept pointing to Newfoundland as the best place in the world to pursue this project given the wind resources and deep-water ports, most of which had fallen into disuse."

"The Port of Botwood was not only available, but had also been used previously by Abitibi and other companies. So we thought this was a chance to bring some life back to the community which had suffered the loss of jobs and economic livelihood."

The decision to proceed with EVREC also came well over a year before Prime Minister Justin Trudeau and German Chancellor Olaf Scholz signed a transatlantic supply corridor agreement intended to supply green hydrogen to Germany.

"We were able to win the bidding process to build EVREC despite competing against an all-star list of global companies that had submitted proposals, and this was due in large part because we were early and had already locked up what I would call the Boardwalk and Park Place locations in Newfoundland," Sood explained.

EVREC is the second major project to be launched in Newfoundland and Labrador in parallel with the Stephenville green hydrogen plant being developed by World Energy GH2 on the west coast of the province.

Abraxas expects to complete the permitting process within a year and achieve financial close by the end of 2025 wherein a large component of its debt will be secured against investment tax credits issued by the federal government.

The company expects to break ground on EVREC by early 2026 and according to Sood "would then be looking at a three year construction period" prior to going online in 2029.

McDermott to the fore

Most of the advance work on EVREC is being undertaken by Houston-based McDermott, a global engineering firm that has overseen some of the world's largest energy sector megaprojects.

Under the terms of its agreement with Abraxas, McDermott will provide front-end engineering design, engineering, procurement and construction (EPC) execution planning services, in addition to EPC cost estimates for green hydrogen production, ammonia processing and product storage.

"McDermott is unquestionably one of the top firms in this space. Even though they have no equity stake in the project and they are acting as a service provider, they do have exposure in the sense that they're betting on Abraxas," Sood said.

"They're spending thousands and thousands of hours on the project and they won't make very much money off of just the upfront work, the pre-engineering and prep-feed type work. That's not what they're in it for.

"They've made an investment in us in the sense that they expect this project can very profitable for them once the actual construction process gets underway." 

Abraxas aims to be major renewable energy player

Abraxas aims to leverage renewable energy as the foundation for all its projects, positioning itself as a major player in sector.

In addition to EVREC, Abraxas is majority owner of projects in locations such as Sri Lanka and the Maldives where conventional renewable energy projects are not viable.

"Our philosophy at Abraxas is that we're living in a new era in renewable energy development and we want to unlock returns from this space using new technologies," Sood said.