The Strike Energy Ltd [ASX:STX] shares are up today after announcing it has signed separate non-binding memorandums of understanding (MOU) with ATCO and Infinite Blue Energy to source green hydrogen for their Project Haber.
Project Haber is a 1.4 million tons per year urea fertiliser production facility that Strike is planning to build in Geraldton, Western Australia.
Strike is looking at powering the project in the beginning through a 10MW electroliser, which will be located on site. Once it starts operating, Project Haber is set to produce 1,825 tons of green hydrogen a year, the equivalent of around 2% of the plant’s total hydrogen feedstock.
Yet Strike plans to increase Project Haber’s demand for green hydrogen over the next years. By 2033, when Strike estimates costs for green hydrogen will fall below $2 a kilo, Strike reckons the project’s demand for green hydrogen will be at over 30%. That’s why Strike is looking at collaborating with ATCO and Infinite Blue Energy on infrastructure and supplying green hydrogen for the project.
Project Haber is designed to produce and consume 141,000 tons of hydrogen a year, which Strike says presents a great long-term and growth opportunity for green hydrogen suppliers…and Australia’s budding hydrogen market.
As Stuart Nicholls, Strike’s CEO and Managing Director, said:
‘Progression of these MOUs with two of the key green hydrogen developers in the Mid-West is a great step in accelerating the WA hydrogen economy.’
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Project Haber is also set to become a carbon sink
You see, as time goes on, the project will not only need more green hydrogen, but also more carbon dioxide to function, as you can see below.
Source: Strike Energy
Once it gets past 40% of green hydrogen demand it will need to start importing carbon dioxide from other industries to keep making urea fertiliser.
The estimate is that it will need around 500 kpa of CO2 by 2044.
As Nicholls continued:
‘Incorporating green hydrogen in Project Haber’s urea production process will enable Strike to produce some of the lowest carbon urea possible and potentially create one of Australia’s largest carbon sinks, moving Strike into carbon negative territory.’
Strike shares slightly up
At time of writing, Strike’s shares are up 1.72% after the announcement, trading at 29.5 cents.
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Best,
Selva Freigedo,
For Money Morning
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