Building the next generation of energy storage

GLOBAL ENERGY STORAGE (GES) I PROFILE

Global Energy Storage (GES) is building a global network of first-class energy storage assets with plans to invest $250 million into brown and greenfield sites, initially across Europe and Asia. Backed by Bluewater, the specialist international private equity firm, GES has unveiled its first significant investment at the Port of Rotterdam, with the aim to make it one of the largest low-carbon storage developments at a world-class industrial hub. Profile by Andy Probert.

ASenergy transition continues to play an ever-increasing role, not only in changing the face of the oil and gas industry but in the wider world, the need to develop cutting-edge storage units is being fully and quickly grasped by Global Energy Storage (GES).

GES was only established in mid-2021, but it comes with two massive gamechangers – its exceptionally experienced management team and the $250 million backing of Bluewater, the specialist international private equity firm focused on the middle-market energy sector. A statement of intent if ever there was one.

Its goal is to build out a global network of first-class energy storage assets on brown and greenfield sites, initially across Europe and Asia over the next five years, while also exploring opportunities in the Americas and Africa.

Energy transition focus

GES has a focus on energy transition fuels and fuels of the future. Its strategy concentrates on critical global hubs, international cross-linked business, and long-term relationships with top-tier energy suppliers.

“There is an urgent need for storage assets for the next generation of low carbon fuels,” commented Peter Vucins, GES CEO. “GES has the expertise and financial backing to develop this crucial infrastructure at key locations around the world.”

Focusing on low carbon commodities, energy transition fuels, and potentially renewable energy sources in the future, GES has a robust global pipeline of pending deals.

Its first major investment is at Europoort in the Port of Rotterdam. In November 2021, GES announced that it had agreed to buy part of the assets of the Stargate Terminal from Gunvor Group

and will develop more than 20 hectares at the heart of the port. The site includes a significant 500m waterfront with deep water access, brownfield development opportunities and potential greenfield development sites.

GES’s ambitious plans include the development of a new multi-purpose seagoing jetty and developing infrastructure for consolidation of biofuel storage, storage for renewable fuels, gas storage, gas to chemicals production, green and blue hydrogen and hydrogen carriers such as ammonia.

Mr Vucins said: “This project aims to become one of the largest low-carbon developments at a world-class industrial hub, with the potential to significantly reduce the carbon footprint of future business in the Port of Rotterdam.

“Alongside a new jetty that we aim to develop and low-carbon commodity infrastructure, we are also looking to become part of the logistics chain needed to import blue and green hydrogen.”

Window to invest

GES’s commitment to taking a leading role in the energy transition sector is anchored in the fact that the management team is the same one behind the growth of its sister – and leading hydrocarbon storage venture – Global Petro Storage (GPS).

An independent storage and logistics company headquartered in Singapore, GPS was created in 2016 and backed by equity funding managed by Bluewater and White Deer Energy. It now has three key global storage hubs comprising gasoline and ethanol storage and rail in the Port of Amsterdam, an oil products and petrochemicals facility in Sharjah, UAE and Southeast Asia’s largest LPG storage terminal at Malaysia’s Port Klang.

Mr Vucins explained: “As we invested around $300 million in these GPS facilities, we realised there was a substantial shift away from oil, and a large growth market in gas.

“Bluewater wanted to continue to back the management team with more time and money. So, with the creation of GES, we now have a window of approximately seven or eight years to continue to grow, and with Bluewater on board, an initial $250 million to invest with a greater focus on energy than on petroleum products.

“GES is essentially the extension of GPS reflecting the management team’s journey from oil to gas and then further afield into low carbon products, hydrogen and hydrogen carriers.”

According to Mr Vucins, the term ‘energy transition’ means different things to different people in different parts of the world.

“We see a lot of growth potential in LPG and LNG usage in emerging markets such as Asia, South America and also Africa. LPG is a relatively inexpensive, safe and clean alternative fuel to kerosene or charcoal for domestic applications, and LNG is an important substitute for coal which is being phased out as it is recognised as the worst fuel for power generation in terms of emissions.

“In Europe, energy transition means trying to get net zero fuels as quickly as

GLOBAL ENERGY STORAGE (GES) I PROFILE

possible. E-fuels, hydrogen and hydrogen carriers, which carry ammonia, are among that mix. We are one of the few management teams that has expertise and a proven track record in that sector.”

On the Rotterdam project, he reflected: “Our development efforts are focused on establishing expandable platforms located at crucial crossroads of energy flows. Rotterdam is one, and will undoubtedly be among the first where energy transition will take place as the infrastructure is already in place.

“We approached Gunvor to buy part of their asset in Rotterdam to give us cash flow basically on sale and leaseback. We buy some tanks, they rent them from us, and we buy rights for the land, helped by the generated cash flow.”

GES is not doing the operations for the initial deal, with Gunvor “running the show as they currently are,” he said. “It’s a stepping stone. There will be approximately 200,000 cm of naphtha storage over the long term, and we will get 20 hectares of vacant land and 500m of deep waterfront.

“The premise is a greenfield focused company in the energy transition sector in the best possible location to develop infrastructure for clients. We have the land locked down in an ideal location, and it is the first phase of the project.”

New projects

Mr Vucins said the company is looking at potential chemical opportunities, such as storage and processing and refining gas to chemicals.

“I have high hopes for ammonia because we can build ammonia, and we have experience of that. We are in the TransHydrogen Alliance. We are looking at bringing ammonia to Rotterdam, ultimately green ammonia to be cracked and sold as green hydrogen to north-west European users. But in the short term, it could be grey ammonia that GES would store,” he added.

On other proposed GES projects, he disclosed: “We are pretty far along in a greenfield gas project in Europe, not in Rotterdam. In the first half of 2022, we hope to make an announcement.

“We are looking for other opportunities similar to Rotterdam, such as on the UK’s east coast as we believe it will be one of the leaders in green hydrogen. We are also looking in the Mediterranean. In the Far East, GES is trying to develop an ammonia asset in the Greater Singapore region as we believe there is potential demand.”

He said the biggest challenge was the energy transition itself, as well as who and how it would be paid for, such as through carbon taxes on polluters.

“Until then, you have an uneven playing field because you need a green premium. That’s the real issue because if large utilities or others were willing to pay the price difference, then there’s no question that GES and other companies would immediately build the infrastructures.”

Top tier clients

GES, confirmed Mr Vucins, is trying to find ways to overcome that ‘chicken and egg situation’ by going from grey products to blue or green that use the same infrastructure, or setting up completely new supply chains with partners by producing green

ammonia in cheap places, shipping it to Rotterdam and cracking it to hydrogen.

“Once those strategies start to materialise, we can build the infrastructure.”

He added: “What differentiates us is that we have the expertise to build these complex projects with ammonia, LPG and LNG. Being small and with private equity, we are more agile than most and, importantly, global.”

GPS has two noteworthy client relations: with Equinor in Port Klang and Varo in Amsterdam, with GES having relations with Gunvor.

“Collectively we understand what customers want from us,” asserted Mr Vucins. “What we want to do is to build bespoke assets for top-tier clients that give us a long-term offtake and a clear view as to who is going to use the asset. We aim to build more relations through GES and attract similar premium clients by understanding their bespoke needs and acting on that in a particular time and place.”

He said GES would look to manage between three to six projects as and when the time was right.

“We are very mindful of our ESG and are working to develop our policies further. Ultimately, we hope to make a big difference with the infrastructure for green ammonia.

Mr Vucins concluded: “The whole premise of GES is for transitional lowcarbon fuels. With greenfield sites and focusing on new markets, we have a major advantage in not being pinned down by massive legacy assets. It is easier for us to start from scratch and build upwards.” n