BPH Energy (ASX: BPH) has welcomed the reaching of an important milestone in its plans to participate in the multi-billion dollar hydrogen sector with the signing of a hydrocarbon process agreement by its investee companies.
The agreement also has the potential to open up opportunities for the development of a sizeable “stranded” gas field in northern Australia.
BPH’s investee companies are Clean Hydrogen Technologies, in which it holds an 8% direct interest and Onshore Energy, in which it has a 36.1% direct interest.
Onshore Energy is in turn a 100% subsidiary of Advent Energy which has rights to natural gas assets at the Weaber field located in onshore Retention Lease RL1 in the Northern Territory’s Bonaparte Basin.
Advent has reported that the 2C contingent resources for Weaber are 11.5 billion cubic feet (Bcf) of natural gas following an independent audit by RISC.
Significant upside 3C contingent resources of 45.8 Bcf have also been assessed independently by RISC.
New development agreement
Under the agreement, Onshore and Clean Hydrogen propose to develop a strategy under which Clean Hydrogen will process the hydrocarbons from Advent’s gas opportunities to produce high-value hydrogen and carbon black products.
Clean Hydrogen has identified a capability to process hydrocarbons from natural gas and produce two products, hydrogen (sometimes referred to as turquoise hydrogen) and carbon black.
The global clean hydrogen market was valued at approximately $5.6 billion in 2022 and is projected to reach $27.1 billion by 2032, growing at a CAGR of 14.8% from 2023 to 2032.
Carbon black is widely used in various applications for tyres, black colouring pigment of newspaper inks, resin colouring, paints, and toners, antistatic films, fibres, and floppy disks and as an electric conductive agent of high-technology materials.
The global carbon black market size was estimated at approximately $35.6 billion in 2022 and is forecast is to grow at 6% CAGR to reach approximately $71.2 billion in 2033.
Clean Hydrogen commercial system
Clean Hydrogen is currently developing a commercial system aimed at creating scale and commercial objectives from its specialised products.
The company’s end-to-end system consumes and processes hydrocarbons via a unique thermocatalytic reactor process and catalysts to produce hydrogen at commercial scale.
Under the agreement the parties will collaborate on developing a plan to include timelines and needs for the production of clean hydrogen products from Advent’s hydrocarbons.
Hydrogen market targeted
BPH Energy revealed its hydrogen market plans in mid-April when it confirmed it was planning to make a significant investment in Clean Hydrogen Technologies.
The company and Advent Energy entered into a binding term sheet with Clean Hydrogen under which they agreed to subscribe for fully paid shares in the technology specialist company, representing a total of 10% of the total issued share of its capital.
The consideration payable under that deal was for an aggregate of approximately $1.4 million comprising of approximately $1.1 million by BPH and $297,000 by Advent, subsequent to which BPH would hold a total 16% interest in Clean Hydrogen and Advent would obtain a total 4% interest.
