Hexagon Energy Materials Limited (ASX:HXG) has signed a non-binding Memorandum of Understanding (MoU) with well-established, large scale, renewable energy company, FRV Services Australia Pty Ltd (FRV Australia).
This MoU covers a collaboration for a potential clean hydrogen hub at Middle Arm, Darwin in the Northern Territory; a new potential North Western Australian Hydrogen Hub development and other collaborations elsewhere in Australia.
In November 2021 Hexagon and FRV Australia collaborated as consortium partners on an AusIndustry grant application in relation to a Middle Arm, Darwin, Hydrogen Hub Feasibility Study. The application was made under the “Activating a Regional Hydrogen Industry – Clean Hydrogen Industrial Hubs: Hub Development and Design program” and led to this MoU and further collaborations.
Both Hexagon and FRV Australia are already progressing individual clean hydrogen and renewable energy projects at or near Middle Arm, Darwin, each of which are fully funded in terms of pre-feasibility studies. FRV Australia has also secured funding for further studies and the construction stage for its hydrogen and renewable energy project.
Hexagon is currently in the final stages of a Pre-Feasibility Study (PFS) on its Northern Territory (NT) Hydrogen project (formally called Pedirka Project). The PFS is scheduled for completion by 28 February 2022 (HXG ASX Announcement: 22 December 2021). The PFS centres on decarbonised (zero net carbon emission) ammonia production (as a hydrogen carrier), through hydrocarbon-based hydrogen production with CCS. The project is targeting production of up to 1.6 million tonnes per annum (t.p.a.) of ammonia or 300,000 t.p.a. hydrogen equivalent. The Middle Arm Sustainable Development Precinct at the Port of Darwin is expected to have a number of critical clean hydrogen project and hub components such as access to established, large scale CO2 geo-sequestration infrastructure and reservoirs (Carbon Capture and Storage (CCS)) and port (export) infrastructure.
Collaboration between FRV Australia and Hexagon under the MoU announced today could provide Hexagon access to FRV Australia’s mix of renewable energy products to supply the power required for Hexagon’s proposed hydrogen (clean Ammonia) production plant. This would see less CO2 generated from Hexagon’s blue hydrogen production facilities, requiring less CCS, therefore lowering overall production costs for Hexagon’s projects.
FRV Australia is indirectly owned 51% by Fotowatio Renewable Ventures S.L. (FRV) and 49% by OMERS, one of Canada’s largest defined benefit pension plans.
Globally, FRV and its affiliated companies have installed 2GW of renewable energy generation with another 560MW under construction, with several green hydrogen projects constructed and in operation abroad, ranging from <1MW to 20MW in size.
FRV Australia has successfully developed nine solar farms in Australia that are currently producing a combined total of 781MW of electricity sold into the National Electricity Market (NEM) and is currently developing additional projects within the Northern Territory including its 29MW Berrimah Solar Farm where installation of an electrolyser is under assessment. FRV Australia’s team includes green hydrogen plant design and equipment supply specialists, solar engineer professionals, construction and project management professionals and commercial analysts as well as a dedicated asset management team.
We have been assessing all options available to progress our NT (Pedirka) Hydrogen project. This MoU underpins a potentially important step forward for us in realising efficiencies and in improving the commercial viability for our base case decarbonised ammonia production plant,” Hexagon Managing Director Merrill Gray said.
“This MoU with FRV Australia is one of many important opportunities and collaborations, both in the NT and other locations, that will help to realise our objective in establishing the most practical pathway for Hexagon to achieve large scale, long term, commercial, clean hydrogen production in Australia” Ms. Gray said.
The next steps will be to identify and scope specific hydrogen projects to potentially move to conditional Heads of Agreement and onto binding commercial agreements.
Hexagon is a future energy materials company focussed on the clean energy transition of which hydrogen is a cornerstone. In addition to the NT Hydrogen and WA Hydrogen projects Hexagon holds highly prospective assets including the McIntosh Nickel-Copper, PGE Graphite Project and the Halls Creek Gold and Base Metals Project.
Mr Gray said the company’s vision for its Australian hydrogen business is to deliver clean hydrogen in the most economical form into export and domestic markets at scale over the coming four years. This non-binding MoU with FRV has the potential to deliver large quantities of low-cost renewable energy for use in hydrogen production supporting delivery into this vision.
