Global Energy Ventures Ltd’s letter of intent with HyEnergy project partners could be important endorsement for the C-H2 ship: Edison Investment Research
GEV is developing the world’s first large-scale compressed hydrogen (CH2) ship to aid in the transportation of “green” (zero-emission) hydrogen, which could be used to decarbonize hard-to-reach heavy greenhouse gas emitting industries.
() recently signed a Memorandum of Understanding (MoU) with Province Resources Ltd and Total Eren to support a technical and commercial feasibility study on the export of green hydrogen from the HyEnergy project.
Under the terms of the MoU, GEV will conduct a feasibility study to assess the technical and commercial feasibility of exporting green hydrogen from the HyEnergy project in Western Australia’s Gascoyne region.
Scope includes transportation from the onshore hydrogen gas production facility to an offshore ship loading buoy and then on to the nominated markets in the Asia Pacific region using the GEV compressed hydrogen transportation solution.
Edison believes that if the study is successful, it could open the door to commercializing the clean transportation of compressed hydrogen from Australia to Southeast Asia and similar operations in Europe, which could give GEV a first mover advantage.
The market research company’s valuation of 18 cents per share means an increase of 157% compared to GEV’s current share price of 7 cents.
Excerpt from Edison’s recording of coverage on July 23, 2021:
Global Energy Ventures (GEV) is one of the first transport companies to offer the prospect of truly emission-free hydrogen production and supra-regional hydrogen transport solutions.
Its innovative C-H2 ship design has been approved and is in the early stages of development and construction with an expected launch in 2026. It most likely serves markets in Southeast Asia, but also has exciting applications in offshore power generation in Europe.
Our scenario models suggest IRR between 10% and 19%.
The C-H2 ship would have two tanks with a capacity of 1,000 tons in the hold, which are pressurized to 250 bar.
The ship is ultimately powered by a fuel cell that generates energy from green hydrogen stored in the ship’s hold, which means emission-free fuel for transportation.
Therefore, the C-H2 ship has “green cargo” and the cargo itself provides emission-free fuel for transport. With the exception of shipbuilding, this solution could be zero-carbon and could be a key differentiator for GEV as it helps companies meet decarbonization goals.
Excerpt from Edison’s signature of the MOU update on August 23, 2021:
The Memorandum of Understanding (MOU) recently signed between GEV and the HyEnergy project partners may confirm the validity of GEV’s own scoping study.
The study highlighted the cost benefit of transporting compressed hydrogen, the technical feasibility of GEV’s compressed solution, and confirmed the potential cost of producing green hydrogen in Western Australia.
If HyEnergy’s own scoping study ends with a positive result, it could prove to be a catalyst that really boosts GEV’s compressed hydrogen transport solution.
We are sticking to our existing financial forecasts.
Market Opportunity: Renewable Energy Imbalance
Australia is blessed with abundant renewable energy sources (wind and solar) and relatively limited local demand given the population.
In contrast, several countries in Southeast Asia have committed to decarbonising their economies, but face challenges in meeting the goals given their geographic location.
GEV is trying to remedy this imbalance by moving excess energy in the form of green hydrogen from Northern and Western Australia to areas of high demand with its novel pressurized hydrogen tanks.
Evaluation: NPV calculation implies attractive IRRs
Our original modeling suggested potentially attractive IRRs from a number of scenarios that fit this potential project in terms of location, scale of production, and timing, with first deliveries around 2026.
The cost of the study is expected to be within existing projections, which already include expected fundraising to develop the ships and fund studies like this one.
However, there are significant risks to achieving the expected returns, including financing, hydrogen availability, hydrogen prices, the fact that the hydrogen market is in the early stages of development and the ship design is new.