Provaris Energy Ltd is pleased to provide the following update on the Company’s development activities for the quarter that ended 31 December 2022.
WORLD’S FIRST ‘DESIGN APPROVAL’ FOR COMPRESSED HYDROGEN CARRIER
• American Bureau of Shipping (ABS) awards FEED Design Approval for the 26,000m3 H2Neo Carrier, comfirmed
Provaris’ design approach for compressed hydrogen (H2) ships (GH2 Carriers) is sound and provides confidence to
progress the development of our larger 120,000m3 H2Max carrier and hydrogen storage barge.
• Small-scale material and weld procedure testing ongoing for structural steel plate and stainless-steel liner, with
completion due in April 2023.
• The focus will now shift to shipyard selection process in 2023, Provaris remains on track to execute shipbuilding
contracts for the H2Neo within 2023 to be available for large-scale hydrogen shipping in 2026.
BUSINESS DEVELOPMENT DELIVERS FIRST COLLABORATION PARTNER IN NORWAY
• Post the quarter, Provaris announced a collaboration with Norwegian Hydrogen AS to jointly develop green hydrogen
supply chain projects in the Nordic region, including Norway as an origin of supply, with a focus on supply to key
European ports. Norway represents 50 per cent of the hydropower reservoir capacity (50 TWh) of the EU and has
identified ample resources for additional renewable power through on- and off-shore wind, and is consequently,
highly strategic in reaching the REPowerEU ambition of 10mtpa hydrogen imports by 2030.
• Provaris continues to qualify and advance multiple opportunities where Provaris’ GH2 Carriers are being positioned
as a low-cost hydrogen carrier in the regional markets of Asia and Europe.
• Successful marketing trip to Japan and Singapore highlighted compressed H2 supply chains can deliver low-cost
hydrogen in the region, creating opportunities for green hydrogen supply from Provaris’ Tiwi H2 project.
TIWI H2 EIS APPROVALS AND EARLY-WORKS PROGRAM ONGOING
• Appointment of lead Environmental Consultant and commencement of the Environmental Impact Statement (EIS)
for submission in Q4 2023.
• Appointment of Owner’s engineers and commencement of early-works program for a detailed ground survey and
geotechnical, to advance the Solar Precinct towards a 30% design level package in 2023.
• Appointment of legal advisors and drafting of land agreements required for the Tiwi Land Council and others, with
negotiations to commence in early 2023.
• Appointment of Darwin-based Lindsay Whiting as Tiwi H2’s Facilitation Manager, who has a long family relationship
with the Munupi clan, a product of the Pirlangimpi community, and held prior management roles at the existing Port
Melville facility located on Melville Island.
HYENERGY EXPORT FEASIBILITY COMPLETED
• Completion of Milestones 5 as part of the WA Renewable Hydrogen Fund grant, with a public Knowledge Sharing
Report to be made available by the WA Government in 2023.
CORPORATE
• Cash position of $8.1 million on 31 December 2022.
• Strategic Advisor appointed in Oslo to support Provaris Norway AS to fast-track opportunities for strategic project
and financial partners in Europe.
Provaris Managing Director and CEO, Martin Carolan, commented: “Achieving world-first Design Approval
from ABS (a recognized IACS member) for a bulk compressed hydrogen marine carrier is a critical de-risking milestone
for the company as we continue to align our technical program with delivery of commercial opportunities now
advancing for Provaris.
Provaris has seen a step-change in the interest from industrial partners to unlock the challenges of storage and
transport within the hydrogen value chain, with opportunities in Asia to run in parallel with our recent collaboration
announcement for the development of hydrogen value chains in Northern Europe. The application of compressed
hydrogen to transport gaseous green hydrogen within regional proximity of demand locations is an obvious pathway
and we are confident the simplicity and flexibility of our compressed H2 supply chain can provide a cost-competitive
solution this decade and a solution that is aligned with ramp-up volumes of hydrogen demand near term.”
During the quarter, Provaris achieved the critical milestone of Design Approval for the H2Neo hydrogen carrier, with
the American Bureau of Shipping (ABS), having reviewed, verified, and approved the design of Provaris’ 26,000m3
H2Neo compressed hydrogen (H2) carrier, the first of its kind to receive this level of approval.
This approval follows the completion of an extensive Front End Engineering Design (FEED) program and ABS review.
It confirms that our innovative and safe and cost-effective multi-layered hydrogen tank can be incorporated into our
H2Neo Carrier and meets the requirements for Ship Classification.
Design approval maintains first-mover status for compressed H2 to deliver bulk-scale marine storage and transport
solutions for the hydrogen industry, with our target to execute shipbuilding contracts for the H2Neo within 2023 and
commence large-scale hydrogen shipping in 2026.
ABS approval for the H2Neo Carrier confirms that our design approach to compressed hydrogen ships is sound and
will allow us to accelerate the development of our larger 120,000m3 H2Max carrier and hydrogen storage barges,
providing additional capability and capacity to for strong future demand for hydrogen.
Provaris’ Chief Technical Executive Officer, Per Roed commented: “The success of our FEED design stage and
corresponding approval milestone is the result of extensive design and engineering works by Provaris’ team of discipline
experts and consultants that have actively contributed to the development of Provaris’ innovative H2Neo hydrogen
carrier. Through our close collaboration with ABS throughout this three-year process, we are confident that our
compressed hydrogen carriers can safely and effectively provide the maritime transportation of hydrogen at a time
when storage and transport remain key to unlocking markets with ambitions for hydrogen imports at scale from 2026.”
ABS’ Senior Vice President - Global Engineering and Technology, Patrick Ryan commented: “ABS
recognizes the potential that hydrogen shows in supporting a sustainable, lower carbon future. Safe and efficient
storage and transportation of hydrogen at sea will be critical to the development and viability of the global hydrogen
value chain. We have been working closely with Provaris, initially granting AIP in 2021 and subsequently reviewing
their comprehensive FEED level package for the H2Neo.
ABS is pleased to award Provaris approval of their design, and we look forward to continuing this relationship into
continued testing and construction stages of H2Neo carriers, including a yard selection process, and to support Provaris
during ship operations on the numerous, interesting projects on the H2 horizon.”
Provaris has spent 12 months completing this extensive FEED level design package for the H2Neo, which was
delivered on-time and on-budget and culminated in the receipt of Design Approval from ABS, that confirms:
i. The ship design is verified as capable of transporting compressed hydrogen at bulk-scale at 250 bar pressure;
ii. The FEED package is sufficient for shipbuilders to quote (price and schedule) with confidence; and
iii. Critical safety studies, process and risk analyses have been carried out, which allowed ABS to verify relevant
safety aspects of the ship’s design and operation.
ABS Consulting has also carried out risk and safety workshops (HAZID) and specialist studies concerning gas dispersion, explosion and fire analysis to help assess and mitigate the risks associated with the storage and transportation of hydrogen. This is the first time that an extensive HAZID and FEED level design for a bulkscale hydrogen carrier has been concluded.
Provaris will continue to work with ABS throughout the next phases of detailed production design, cargo tank testing
and construction, and will continue to update shareholders on key milestones.
The approval allows shipbuilders to provide firm quotations for the construction of a fleet of H2Neo Carriers. The
shipping team’s focus now moves to shipyard selection with world-leading ship broker Clarksons engaged to conclude
a global shipyard identification and selection process in early 2023.
EUROPE
In Europe, our focus continues on maturing commercial discussions with prospective collaboration partners in Norway
where H2 export projects can take advantage of low-cost renewable hydro power and on- and off-shore wind power
and develop coastal export opportunities, given the limited grid connection in the country and taking advantage of the
short shipping distance to the key import ports of Germany and Netherlands. Multiple parties continue their evaluation
of our GH2 Carriers and supply chain for hydrogen storage and transport.
Provaris established Provaris Norway AS and opened an office in Oslo in August 2022, with our CTO, Per Roed, now
residing full-time along with the key appointment made for Provaris Norway AS, with Oslo-based Herman Hildan joining
the team as a Strategic Advisor to fast-track commercial opportunities for compressed H2 storage and transport in
Norway and across Europe.
During the quarter, Provaris completed due diligence with one of the parties identified in 2022, culminating in the
execution of a Memorandum of Understanding (MOU) with Norwegian Hydrogen AS, a Norwegian-based
developer of hydrogen production hubs and value chains across the Nordic region. This collaboration brings
together the skills, experience and ambitions of both companies to accelerate the development of a hydrogen value
chain covering the production and export of hydrogen to the key ports of Europe.
Jens Berge, Norwegian Hydrogen’s CEO commented: “We are excited to work with Provaris on a solution which will bring green hydrogen to the EU market in a flexible, cost effective and timely manner. The vast experience and diverse capabilities within the combined Provaris and Norwegian Hydrogen team, along with a huge demand for green hydrogen in the EU, makes this a great opportunity for both parties.”
A joint Design Concept Study will be completed in the March quarter of 2023 to identify a preferred
production and export site and determine the technical and economic viability of a fast-track green
hydrogen supply chain connected to key ports in Germany and the Netherlands.
With multiple sites under consideration across the Nordic region, this collaboration will target the export of green H2 by
2027.
Provaris continues to progress further commercial and collaboration partners in Norway.
Norway is now demonstrating an increasing interest in regional hydrogen trade given the market is within a 400 to
1,000 nautical mile range. Norway also represents 50 per cent of the hydropower reservoir capacity of EU and is
consequently key in reaching the REPowerEU ambition of 10mtpa hydrogen imports by 2030. Furthermore, Norway is
committed to being a long-term hydrogen supplier to Europe as confirmed in the Joint Statement (link)
of the German and Norwegian governments on 5 January 2023 on increasing maturity of the hydrogen
value chain. Hydrogen projects in Norway can also benefit from the significant funding support and schemes provided
by the EU.
ASIA
In October, Provaris completed a marketing trip to Japan and Singapore. For Japan, this was the Company’s first trip to
market compressed H2 midstream delivery and the Tiwi H2 project. Meetings included Japanese corporations with H2
offtake requirements from 2030, trading houses that have global H2 development opportunities and offtake ambitions,
and the Ministry of Economy, Trade and Industry (METI) which sets policy decisions concerning the country’s H2
strategy. For Singapore, the trip coincided with Australia’s recent signing of the Green Economy Agreement (GEA) and
the Ministry of Trade & Industry (MTI) launching the country’s National Hydrogen Strategy to accelerate the transition
to net zero emissions and strengthen energy security.
Based on the increasing focus on hydrogen, Provaris held discussions with the key Singapore agencies (MTI, EDB, EMA,
MPA) and end-users of gaseous hydrogen for direct fuel or as renewable green power and has identified new
opportunities for further investigation as potential offtake or commercial opportunities.
Potential opportunities are also aligned with the timelines of our H2Neo development and midstream offering in 2026,
along with the development and export timelines for Tiwi H2 in 2027.
Provaris acknowledges that its proposed Tiwi H2 Project is located on the traditional lands of the Munupi people. It is a privilege to
have the support and such a close working relationship with the Munupi Clan and other key stakeholders.
The Company continued to advance its flagship green hydrogen export project (Tiwi H2) during the December quarter.
Located on the Tiwi Islands, Northern Territory (NT), the Tiwi H2 project will develop an integrated compressed
hydrogen export supply chain for up to 100,000 tonnes per annum, avoiding up to 1 million tonnes of CO2 emissions
annually.
Focus for the December quarter included:
> Planning and appointment of Darwin-based EcOz as lead Environmental Consultant to commence the preparation
for submission of the Environmental Impact Statement (EIS) in 2023, along with all Territory and Federal approvals.
> Appointment of CE Partners as owner’s engineers to develop the detailed design of the renewable generation
component of the project. This comprises the solar farm, battery energy storage system, substations and
transmission line connection to the H2 Production Precinct.
> Commenced an early works program, including an aerial survey of the plantation area undertaken in November
2022 (providing +/- 10cm elevation mapping); geotechnical site investigations including a shallow drilling program;
and hydrology and lightning studies, to advance the Solar Precinct towards a 30% design level package ready in
2023 and then seek construction proposals and selection of a preferred EPC contractor in early 2024.
> Appointment of Darwin-based legal advisors WardKeller to commence drafting various land agreements required
for the Tiwi Land Council and others, with negotiations to commence in early 2023.
> In line with Munupi Clan permissions granted, Provaris is progressing with site access and clearing approvals for
the procurement and installation of two solar monitoring trailers within the Northern Beaches plantation area for
18 months of solar monitoring.
Lodgement of an EPBC Referral submission to the Australian Federal Government’s Department of Climate Change,
Energy, the Environment and Water. The EPBC Referral is the second of the project’s environmental assessment
processes, with a decision expected in early 2023.
> Appointment of Darwin-based Lindsay Whiting as Tiwi H2’s Facilitation Manager, who has a long family relationship
with the Munupi clan and Pirlangimpi community, and held prior management roles at the existing Port Melville
facility on the Tiwi Islands.
Lindsay Whiting commented on his appointment: “I look forward to being part of the
Tiwi H2 project team, working towards the achievement of key project milestones and targets
set by the Company. My contribution to the project is based on my experience and local
community knowledge, I see my role predominantly to provide an open and honest dialogue
between the key stakeholders, Provaris and Munupi. Most importantly ensuring the Munupi
family is front and centre of the discussion, for the future economic development on the
island, employment, social benefits and protection of the environment”
Lindsay is a proud indigenous man born in Darwin with deep experience in the construction
industry, predominantly in remote regions of northern Australia. He has also spent many
years working in the maritime industry in both land and sea-based roles. Key roles include
Port Manager of the Port Melville facility, Pilot Boat Master and Port Facility Security Officer.
Lindsay has teamed up with partners and created Apsley NT, a newly established business
applying in-depth knowledge of each client’s site to deliver quality work, safely and on time.
In August 2021, Provaris entered a non-binding Memorandum of Understanding with Province Resources (ASX:PRL)
and global renewable company Total Eren (together the HyEnergy Project partners) to support a technical and
commercial feasibility study on exporting green hydrogen using compressed shipping from the 8 GW HyEnergy Project
located in the Gascoyne region, WA, to nominated markets in the Asia-Pacific region. The study focused on a proposed
phase 1 capacity of renewable energy generation for the export of 200,000 tpa of compressed H2 (out of a total of
550,000 tpa). The Study has received funding as part of the WA Renewable Hydrogen Fund (Round 2).
During the December quarter, Provaris completed Milestones 5 as part of the WA Renewable Hydrogen Fund grant,
which includes the public Knowledge Sharing Report. As per the Financial Assistance Agreement executed with the WA
Government, the outcomes of the Study Report are to be made available by the WA Government.
Key appointment was made to Provaris Norway AS, with Oslo-based Herman Hildan joining the team as a Strategic
Advisor to support our activities to fast-track commercial opportunities for compressed H2 storage and transport in
Norway and across Europe. Herman brings to the Provaris team significant advisory, capital markets and shipping
expertise and networks having worked in the capital markets for the last 13 years, including his last role as Managing
Director of Investment Banking and before that Co-Head of Equity Research at Clarksons Platou Securities AS.
Cash balance on 31 December 2022 was $8.1 million (vs $9.7 million at 30 September). Cash expenditure
during the quarter was in line with the FY2022 approved budget, with total operational cash outflows of $1.65 million
which includes corporate costs, project costs for Tiwi H2 and HyEnergy studies, and the completion of the H2Neo
FEED level design package and Class approvals program. Refer to the separately announced Appendix 4C for further
details.
The aggregate amount for payments to related parties and their associates included in item 6.1 in the Company’s ASX
Appendix 4C for the quarter ended 31 December 2022 is $228,000 comprising of fees, salaries and superannuation
paid to Directors, including Executive Directors.
