GlassPoint Solar Inc, which first attracted attention when it raised $53M from a sovereign wealth fund in Oman along with existing investors including Royal Dutch Shell, is seeking an exit on the public markets.
“[The next form of financing would be a] mezzanine round and an exit would be an IPO,” said Rod MacGregor, CEO and co-founder of GlassPoint Solar, a US-based company that designs, manufactures and installs solar steam generators for the oil and gas industry. “Shell and the Sultanate of Oman are our strategic partners. We’re entering a growth phase.”
MacGregor has been involved in kick-starting a handful of venture-backed companies, which have all been either floated on the public markets or sold to corporates through trade sales.
The most notable of these was Insignia Solutions Ltd., which was floated on NASDAQ in the late eighties, before the UK had a technology-focused exchange in the form of AIM.
Pre-profit company GlassPoint, which was set up in 2009, is one of only a few solar energy companies to go after the potentially $110bn a year market for solar enhanced oil recovery (EOR).
“If you reduce EOR emissions by one per cent you can reduce emissions by more than every electric vehicle ever made,” MacGregor said. “Oil and gas is the next big thing [in solar]. Oil fields consume gigawatts. In heavy oil production, 20 per cent of the barrels of heavy oil [produced] are consumed just making it.”
So far Glasspoint has deployed its technology in two projects: Petroleum Development Oman, a joint venture between the government of Oman, Shell, Total and Partex; and US firm Berry Petroleum, respectively.
Existing investors in the company prior to its equity round last year included Shell, Rockport, Nth Power and Chrysalix, whose limited partners include Total and Kuwait Petroleum Corporation.” Oman-based sovereign wealth fund the State General Reserve Fund was the only new investor in the round.
GlassPoint is primarily targeting the market for heavy oil production in countries with high levels of solar irradiation, such as areas of the Middle East and China.
The majority of a heavy oil field’s energy consumption is used to produce steam (98 per cent), which is injected directly into oil wells to bring the oil up to the surface, while two per cent is used as electricity for pumps, lights and other operations.
“Companies are burning more oil to drive operations,” MacGregor said. “All Gulf Cooperation Council countries are importing gas; 22 per cent of gas in Oman is used for EOR. Kuwait by 2020/2030 will use more gas for EOR than power generation. Kuwait is adding 11GW of power for steam. Wafra, a single oil field in Kuwait, will consume two billion cubic feet of gas a day.”
GlassPoint deploys large-scale parabolic trough technology arranged in self-cleaning greenhouses imported from the Netherlands that offer a high degree of protection from sand, reducing capital expenses by limiting the need for equipment repurchases and expensive cleaning. This contributed to 98 per cent availability at its plant in Oman, which remained operational during a sandstorm.
“You can never go cheaper than raw materials,” said MacGregor. “The capex is way down.”
For big solar EOR projects, the gas breakeven price is about $5-7/MMBtu equivalent, or about 50 cents a watt, MacGregor estimates. A majority of GlassPoint’s projects are EPC-based and paid for by the customer, while others require project financing.
The company is based in Fremont, the closest part of California state to Silicon Valley, which has attracted the likes of Tesla and SolarCity to set up operations there. GlassPoint has a manufacturing location in Shenzhen, China, in addition to a regional office in Muscat, Oman, and a sales base in Kuwait.
This article originally appeared on www.cleanenergypipeline.com a clean energy news service operated by VB Research, a sister publication to The Engineer. The reporter, Jessica Mills Davies, can be reached at firstname.lastname@example.org.