@navrock1 - I think the only assurance one can get regarding the future of hydrogen will come from established industries picking up the technology and putting it to commercial ongoing use. With that caveat, to address some of your points above:

“To me hydrogen is in a way a storage of energy (or battery) and when it is up against cheap lithium ion and now sodium ion batteries, I wonder….”

The focus of HZR tech is not to store H2 but to create it close to the point of use. Like in the BC Fortis (Canada) facility, which is for power generation. The HZR-H2 generation plant is on site, near the generators. Also HZR’s project association with the French Engie. I believe some Japanese power generator is also testing HZR’s process.

As far as I’m aware, all of HZR’s plants (not built by HZR but by the companies wanting to use their tech) are intended to be “on site,” situated physically close to the point of subsequent use.

“For industries where hydrogen is beneficial as an ingredient it is likely a different story (eg. ammonia, steel).” This is illustrated by HZR’s association with KBR, which is their route into the ammonia and methanol industries. Also POSCO, the Korean steelmaker, is progressing its testing of HZR tech. Again, all plants using HZR tech for H2 generation would be on site.

Other use cases focus on the graphite produced, and there are more and more of those joint projects in the works.

“I do question however the long term viability with natural gas as the feedstock.” Not sure why you question the use of LNG as feedstock as the supply chain for its delivery to all these industries is already there, and the supply of LNG isn’t constrained.

“Hydrogen from water i assume is the holy grail.” That was the case (green hydrogen), but then people started working out the electrical energy required to generate pure green H2 at scale and realized that providing that energy from green sources (as required) was impossible in any practical sense.

In short, the electrical energy required to produce a unit of H2 via HZR’s catalytic conversion of methane is a lot less than the energy required to produce a unit of H2 via electrolysis of water.

HZR management always refers to HZR hydrogen as turquoise, not green, because of the fugitive emissions from the original supply of LNG.

In a nutshell, HZR’s tech makes switching to hydrogen for power generation, ammonia, methanol, graphite, etc practical and non-cost-prohibitive. Against that, trying to use green hydrogen was impossibly energy-intensive.

That’s why all the “green” hydrogen projects folded - the theory was all well and good, but the practicalities didn’t stack up.

In a way, you could say that the folding of the “green" hydrogen projects opened the door wide for HZR. Right time, right place, right tech.

@navrock1 , it sounds like the projects your company were involved with were the new “Green Hydrogen” that @Clio points out is non-economical and different to the market Hazer is targeting which is mostly the old/current use for Hydrogen for Ammonia & Methanol production via it’s partnership with KBR and for Refining, with Steel Making (DRI) an expected significant future use. This is covered by the company presentation slide:

I haven’t seen any reference by Hazer for application to Hydrogen for vehicles (or FFI use), it is currently focused as @Clio points out on institute production and use where it can provide a “plug-in” to turn existing Hydrogen production into low emission Hydrogen with similar economics.

So Hydrogen has a very big and important future in general, I agree @navrock1 it is questionable that Hydrogen as a way of storing energy is a thing, but currently that is not on the bingo card and is just an upside opportunity should it eventuate.

Once you have listened to a few presentations by Glenn or the SM interview if you haven’t (it’s better than all the other presentations put together) I think you will see where Hazer and Hydrogen sit.

Very much appreciate the real-world sense check on what is many parts of the puzzle around Hydrogen and Hazer – love to know more, things are moving quickly so you may come across other issues.

Cheers.

Yes the green hydrogen projects really fizzled... there was a pilot plant built at the BP site in Brisbane that must have flopped (lucky mr taxpayer put up a big amount for it, really good ROI on that one...) and I saw some tender docs floating around with Fortescue future industries involved that was looking to turn the old incitec pivot site in Brisbane into a green hydrogen plant, didn't see it again after the initial rounds but assuming it has flopped as well.

I just watched the interview this afternoon, feel like I need to rewatch it and do some more research to really understand a lot of what was said but it does sound promising re the tech and the use cases.

feel like the take away was almost the equivalent of the green option for only a marginal cost increase + graphite.

competitors have an inferior reactor that produces carbon black that isn't as valuable or in high demand.

good distribution partner but it won't be a fast rollout but hopefully good projects in the works and the traction really getting started..

Disc: not held but interested

That's pretty much the investment/business case @Schwerms , well put.

Thanks @Clio , regarding the patents, it is good to see they have a lot but with patents the devil is in the detail and if your not a patent lawyer – good luck in telling if the cover is comprehensive.

I would welcome some expert 3^rd party verification if possible, but I don’t see the investment thesis totally dependent on it.  It’s more important that they are a first mover and expand quickly.

If a copycat appears in 5 years, but Hazer has got 10+ customers well progressed and has the commercial credibility then I think they stand a good chance of continuing to dominate and grow even if the market becomes intensely competitive. 

It’s an alternative technology that is significantly better that is the bigger threat. Something that will make the Hazer process obsolete and warrants the capex spend to replace it.

In a way, the weakness of the business is it’s strength. The long lead times and large capex required to switch means that the plants they already have operating the Hazer Process are likely to continue to do so for their expected use life (circa 20 years is the indication). So you have a locked in annuity for each plant, which at the current valuation, doesn’t require many of the ~5000 plants globally that they could have as customers.

Thanks @Clio , @Tom73 and @Schwerms.

After watching the Strawman interview (thanks for the suggestion, I had totally missed that one), I am more convinced and might even add a few $$ for some skin in the game.

@Tom73 FYI only the mention of fuel cells is from their website. https://hazergroup.com.au/about/

I still however hold a couple of reservations personally which I will try to work through over time. To quickly share:

• Graphite quality / value. As a shareholder in Novonix I have seen the issues faced to achieve battery grade anodes. Also i understand graphite is not suitable for sodium ion battery anodes. There are most definitely other significant uses for graphite but I would say this is where the $$$ is.
• I dont quite understand hydrogen in power generation (I am sure I am missing something) but to me burn the gas directly? or is it converted to hydrogen for storage, transport etc.? (this is where I do not personally believe hydrogen can compete with batteries).
• I agree on everything about green hydrogen but I am less inclided to write it off easily on the basis of A) The technology will gradually improve B) we are seeing renewables become so cheap that green hydrogen inefficiency may become less crucial (just a personal thought and I understand that may take ages to play out) especially in countries where natural gas is not cheaply and easily accessed.

Where I am excited is:

• If even a couple of projects go through soon it is a big win.
• The same way we say that natural gas is a transition fuel, this could be a means of transitioning for various industries from a dirtier fuel or to a greener hydrogen.

Thanks again for the input. I should have come a little more prepared earlier apologies but was excited to share some experiences (albeit insignificant). I plan to keep tabs on the company through people I know working in the space but also potentially a cheeky visit to their plant here in WA.

@navrock1 - thanks for your enthusiastic questions. You’re helping me revisit HZR, and I have to confess that once I’ve studied the details of a company’s business to the point of buying in, I tend to push the info to the back of my mind. Pulling it forward and dusting off and rechecking my conclusions every now and then is a good thing!

I agree that there’s a lot of potential value in the graphite side of things. Lots of uses for graphite and not all in the energy space.

Re the use of H2 in energy generation - the reason for it (the attractiveness) is to reduce CO2 emissions. When gas (CH4) is burned, lots of CO2 is generated. If that same gas is converted to H2 via the HZR process, then the H2 burned, you end with water only - the C in the methane goes to the graphite in the HZR conversion process. No CO2 in the actual energy generation.

Also, the reason for the HZR process plant being situated next to the facility wanting to use the H2 is that transporting H2 is not easy, especially over long distances. H2 is the smallest molecule on the planet, so it leaks - in between larger molecules making up any container. That’s why HZR’s approach of converting LNG - where the mining and transporting is all worked out - is so attractive. No transport of volumes of H2 required.

One thing - if you do go on a cheeky visit to HZR’s CDP in WA, you have to spill all here!

Thanks mate!

I just logged in here to share the same realisation about CO2 reduction! It will be more inefficient but hey.. so much less emissions.

Will definitely do with HZR's CDP!