Provaris Energy Ltd is pleased to provide the following summary of the
Company’s development activities for the quarter that ended 30 September 2024.
Significant Progress on Tri-Party MOU with Uniper and Norwegian Hydrogen for a Hydrogen Supply Chain
to Germany
> Provaris, Uniper and Norwegian Hydrogen have released commercial objectives and outlined a roadmap towards
binding agreements over the next 3-6 months, with target milestones including:
• December 2024: Term Sheets for hydrogen sale and purchase agreement (SPA) and shipping
agreements tied to a chosen development project.
• June 2025: Finalisation of binding contractual agreements.
> Uniper is set to serve as offtaker for over 40,000 tpa of RFNBO (green) compliant hydrogen, with a proposed 10-
year hydrogen SPA term to support long-term charters for Provaris’ proprietary H2Neo carriers and H2Leo barges.
> Provaris and Norwegian Hydrogen continue collaborative efforts on developing suitable sites for hydrogen supply.
> In September a delegation from Uniper to Norway’s West Coast advanced commercial terms and technical work
stream, including a site visit to view Provaris’ hydrogen Prototype Tank.
Advancements in European Supply Chain Developments
> Provaris is making steady progress with Global Energy Storage (GES) with the assessment of options for an initial
40,000 tpa compressed hydrogen import project in Rotterdam, including options for hydrogen storage at the terminal.
> Productive discussions and workshops took place with German and Spanish utility companies, with the focus on
technical, operational, safety and economic aspects of compression, and economic elements of compression and
exploring potential hydrogen supply sources in the Nordics and Iberia to meet early hydrogen demand for industrial
clients.
> Ongoing technical and commercial due diligence with potential partners underlines regional industry demand for
innovative and diverse hydrogen supply pathways, reinforcing Provaris’ role in supporting Europe’s hydrogen
transport needs.
Concept Design Study Reaffirms Competitive Advantage of Compressed Hydrogen Supply in Europe
> Results for a 540MW renewable grid connected site, with a sailing distance of 1,000 Nm, when compared to an
ammonia supply chain (delivered as gas), confirms capital and energy efficiencies of compression.
> Efficient compression technology with minimal hydrogen loss enables ~50% greater hydrogen volumes compared to
ammonia and a ~20% lower delivered cost.
> Study outcomes highlight the cost-competitiveness of Provaris’ compressed hydrogen model, in alignment with €1
billion in funding allocated for hydrogen initiatives by the EU Hydrogen Bank and H2Global Pilot in 2024.
Joint Development Agreement with Yinson Production AS for CO2 Bulk Storage and Transport.
> This strategic partnership with Yinson unites expertise in developing innovative, large capacity CO2 tank designs for
bulk storage and marine transport of CO2, based on Provaris proprietary hydrogen tank technology.
> Yinson has a long track record in the construction of floating production, storage, and offloading (FPSO) vessels, and
is well-positioned to support the development of comprehensive carbon capture and sequestration solutions.
> Provaris’ proprietary ‘multi-layer tank IP’ enables larger volume CO2 tanks, optimising cost and transport efficiency
beyond current industry standards of 7,500 cbm for shipping.
Provaris Managing Director and CEO, Martin Carolan, commented: “Our achievements this quarter highlight
our growing momentum and commercial success with European partners. The increasing support for Provaris aligns
well with the EU's investment in low-carbon hydrogen solutions. Our focus on compression, known for its simplicity
and energy efficiency, underscores its role in scaling hydrogen delivery to NW Europe, which depends on imports to
meet industrial demand under tight timelines to achieve emission targets. The diversification into the CO2 supply chain
will expand the reach of our unique tank IP into new commercial opportunities with the backing of a strong partner in
Yinson, an industry leader in the offshore industry.”
Advancing the Tri-Party MOU with Uniper and Norwegian Hydrogen for a Hydrogen supply
chain to Germany
In August, Provaris, Norwegian Hydrogen AS and Uniper Global Commodities SE (Uniper) announced a
Memorandum of Understanding (MOU) to collaborate on developing hydrogen supply chains from Norway and other
Nordic sites, to import destinations in North-Western Europe utilising Provaris’ H2Neo carriers.
The MOU aims to supply Uniper with RFNBO1 compliant (green) hydrogen, which will be produced by Norwegian
Hydrogen and transported and stored using Provaris’ H2Neo carriers and H2Leo storage barges. This non-exclusive,
non-binding MOU spans 12 months allowing for flexible progress towards binding agreements.
By September, collaboration under the MOU advanced significantly, focusing on two main workstreams to finalise by
December 2024:
• Commercial Workstream: Developing key terms for the hydrogen SPA targeting a 10-year offtake contract
tenure for over 40,000 tonnes pa to support long-term charter for Provaris’ proprietary H2Neo carriers and
H2Leo barges.
• Technical Workstream: Concentrating on optimal shipping, compression, and import terminal solutions to
ensure flexible and efficient transport.
Term Sheets for a hydrogen SPA and shipping agreements linked to the chosen hydrogen supply
project are scheduled for December 2024.
Together with Norwegian Hydrogen
we were delighted to host a delegation
from Uniper to Norway’s West Coast. It
was an opportunity to show off the
magic of the West Coast, whilst also
focussing on areas of the commercial
terms and technical areas of the
program, including a site visit to the
facility where the Provaris’ hydrogen
Prototype Tank is located.
Concept Design Study Confirms Energy Efficiency of Compressed Hydrogen Supply Chain for
Regional Europe
Provaris has completed its Concept Design Study (Study) for bulk-scale hydrogen export and import compression
facilities. The Study reinforces the low energy use and low capital of Provaris’ compressed hydrogen supply chain
for regional marine transport of hydrogen in gaseous form.
Outcomes for a 540MW renewable, grid connected site, sailing 1,000 Nm, when compared to the
ammonia supply chain (delivered as gas), confirms capital and energy efficiency benefits of
compression:
The Study provides a robust foundation for developing site specific compression facilities, currently in progress at
selected export terminals in Norway and the Nordics as well as import locations such as Port of Rotterdam in
collaboration with Global Energy Solutions. The impact on increased hydrogen volume delivered at lower prices
compared to an Ammonia supply chain (delivered as gas) is illustrated below.
Germany’s heavy industries: Steel, Cement, Metal Refineries, Chemical Refineries, Shipping and Heavy-duty
transportation (trucks) are increasingly signalling reliance on hydrogen imports to meet demand, underscoring the
importance of Provaris’ energy efficient hydrogen transport solutions for Europe.
The Study, the fourth in Provaris’ series of techno-economic studies builds on an extensive analysis of a 540MW
capacity reservation export site, producing 10 tonnes of hydrogen per hour (equivalent to 87,000 tpa); with an
intra-Europe shipping distance of 1,000 nautical miles using the H2Neo carrier to deliver gaseous hydrogen to the
customer at 70 barg.
The Concept Design Study meticulously evaluated key factors including compression requirements, installed
capacity (MW), energy usage (kWh), equipment selection, capex, opex, etc., for the loading and unloading of
compressed hydrogen from Provaris’ H2Neo compressed hydrogen carriers.
A leading original equipment manufacturer of high-pressure compressor equipment (Compressor OEM) supported
the preparation of this Study with the selection of optimal compression equipment to ensure the project's feasibility.
The installed compression capacity (MW) and energy use during storage, loading, and unloading (kWh) were in
line with the Compressor OEM’s expectations based on the compression equipment selected. Capital and operating
cost estimates were provided for the assessment of project feasibility (level 3) and were non-binding. Any firm bid
package would be submitted by the Compressor OEM, subject to further site-specific requirements.
Joint Development of Import Facility at Port of Rotterdam Expands market access Across
Europe
Provaris and GES enter into a collaboration agreement to develop a new hydrogen import facility as part of GES’
multi-product terminal in the Port of Rotterdam, the largest energy import terminal globally with an ambition to be
a key import hub for hydrogen and connection into NW Europe.
During the quarter, Provaris and GES assessed
options for an initial 40,000 tpa compressed
hydrogen import project in Rotterdam, including
options for hydrogen storage at the terminal. A
preliminary plot plan is being defined for scavenging
compression and the optional storage, including
connection to the European hydrogen backbone, and
assessments have been performed to optimize
operations and costs with due consideration of
terminal infrastructure and pipeline capacity fees (in
service). Initial consultations have been held with
the port authority in order to define the permitting
process for a compressed hydrogen import terminal.
Preliminary studies will be completed during 2024,
together with joint marketing activities planned in
the December quarter.
Advancing the Restart of the Prototype Tank Program in Norway
In June 2024, Provaris was unexpectedly informed that its appointed sub-contractor, Prodtex Industri AS, responsible
for constructing the Prototype Tank, had declared bankruptcy. This development temporarily halted all fabrication
activities impacting the timeline for the tanks completion and testing. Provaris has swiftly enacted proactive measures
and strategic plans to restart the Prototype Tank program and preserve its completion to date.
During the quarter Provaris has made significant strides in resuming the program and safeguarding
prior investments.
• Acquisition of the Production Cell: Acceptance of a conditional offer to the secured lenders for the
acquisition by Provaris of the installed Prototype Tank (production cell), which includes essential robotic and
laser welding equipment and steel materials to complete fabrication. Drafting of an Asset Purchase Agreement
is underway.
• Lease Agreement of the existing facility to undertake fabrication and testing: Key terms of a shortterm lease agreement have been agreed with a party submitting an offer to purchase the Fiskå Facility. The
lease includes ~2,000 m2 of the Fiskå Facility factory (the production cell area) and office space. Remaining at
the Fiskå Facility will save considerable time and cost in completing the Prototype Tank.
• Planning for restart and completion: Advanced planning is in progress to resume fabrication of the
Prototype Tank on the completion of the sale and acquisition of the Fiskå Facility, along with the settlement of
our acquisition of the production cell equipment from the secured lenders.
Provaris remains committed to maximising the value of its existing investment in the Prototype Tank program and
will keep shareholders updated as the purchase process advances and the restart timetable is confirmed.
The addition of the CO2 Tank development program strengthens Provaris’ capabilities by securing control of our own
robotic welding and production facility, a strategic advantage that will accelerate future R&D and testing for CO2 tank
designs as they advance towards marine classification approvals.
Provaris and Yinson Production join forces to innovate on CO2 storage and marine
transport solutions and address significant market demand for CO2 carriers
Post the September quarter (1 October), Provaris announced a binding Joint Development Agreement
(Collaboration) for the development of storage tank solutions for the bulk storage and marine transportation of
carbon dioxide (CO2).
Yinson Production (Yinson) and Provaris will jointly evaluate the technical and economic viability of adapting
Provaris’ proprietary tank design for compressed hydrogen to develop innovative and cost competitive alternatives
for bulk-scale storage and transport of compressed and liquid CO2 (CO2 Tanks). The Collaboration will also assess
the potential for other hydrogen derivatives such as ammonia. Provaris ‘multi-layer tank IP’ will allow for larger
volume tanks and reduced cost and improved efficiency. Milestones include completion of a techno-economic
feasibility study in early-2025.
This Collaboration combines Yinson’s long track record in the construction of floating production, storage, and
offloading (FPSO) vessels for the offshore production industry with Provaris' proven expertise in creating Class-level
designs for bulk marine storage and transportation (H2Neo Carrier) of compressed gaseous hydrogen.
This opportunity allows Provaris to explore alternate pathways in the commercialisation of its tank IP
in partnership with an industry leader in the offshore industry.
Yinson has expanded into the carbon capture and sequestration sector and is developing assets and technologies to
implement the full carbon capture supply chain, and this partnership will help develop cost-effective and scalable
solutions for the storage and marine transport of CO2.
Currently, there is no ship transport of CO2 in a low pressure and temperature range suitable for long sailing distances
and large cargo volumes. The Collaboration aims to help develop a new CO2 tank design solution that will address
current CO2 transit and storage limitations.
The development of CO2 storage and transport infrastructure is crucial for the widespread deployment of carbon
capture, which is a critical pillar in meeting global emission targets. The design of the CO2 tanks is important for
maximizing the amount of CO2 that can be stored and transported in a single cargo.
Lars Gunnar Vogt, Yinson Production’s Chief Technical Officer, said: “We recognize the importance of carbon
capture and storage in achieving global emission targets, and we're committed to playing a key role in this space.
Our collaboration with Provaris Energy will leverage our combined expertise to develop cost-competitive and
innovative solutions for CO2 storage and transportation. We're excited to explore the potential of adapting Provaris'
proprietary tank design for compressed hydrogen to meet the needs of the growing carbon capture market. This
collaboration is a significant step forward in Yinson Production’s plans to drive the carbon value chain.”
No activity was undertaken on the Tiwi H2 Project which remained on hold during the quarter. Maturity of a viable
offtake market for hydrogen in South East Asia along with effective engagement with the Tiwi Land Council’s newly
appointed leadership team and the key stakeholders on outstanding draft project agreements remains key to the
project moving forward. Provaris remains focussed on commercialising its proprietary H2 carrier and supply chain
collaborations in Europe where the supply and offtake market is significantly more advanced than Australia and South
East Asia.
A partially underwritten SPP announced in May was finalised in July, raising $1.0 million (before costs). Final
applications received under the SPP totalled $724,500, with $275,500 placed under the underwriting agreement
supported by a group of major shareholders. Participants in the SPP (including the underwriters) also received 1 free
attaching option for every 3 shares subscribed for. The attaching options have an exercise price of $0.075 and an
expiry date of 2 years from the date of issue.
A $3 million convertible bond facility (Facility), established with Macquarie Bank in May 2024, remains available as a
future source of equity financing with $2.5 million undrawn. A first tranche of $500,000 Convertible Bonds was drawn
as part of the Facility agreements, with a two-year term to maturity. As at the date of this Quarterly Report the face
value of the outstanding first tranche convertible bonds is currently $235,000. The Facility provides Provaris with
access to cost-effective and flexible standby capital during its two-year term and supports Provaris’ forward-looking
development program in 2024-2025. The issuance of further tranches remains at the discretion of Provaris and
Macquarie, ensuring strategic alignment with the Company's evolving financial requirements.
Cash balance on 30 September 2024 was $0.714 million, with elevated operating costs during the quarter related to
the payment of annualised costs and supporting business development activity in Europe. Project costs have materially
reduced in the current quarter while the Prototype Tank program remains on hold. The Company has implemented a
detailed review of all costs across the group resulting in a reduction to all non-core activities, including the closure of
the Perth head office and the removal of areas of discretionary spend not directly benefitting the development of our
tank IP or high priority business development activities. The corporate head office has been moved to Sydney where
we benefit from a shared office facility.
The aggregate amount for payments to related parties and their associates included in item 6.1 of the Company’s ASX
Appendix 4C for the quarter ended 30 June 2024 was $152,000 comprising of fees, salaries and superannuation paid
to Non-executive Directors and one Executive Director.
This ASX announcement has been authorised by the Board of Provaris Energy Ltd.
