Real Energy’s Hydrogen Focus: Envisioning Low Emissions Hydrogen Transition to Renewables

Summary

• Real Energy has interests in the Cooper Basin, Australia’s most prolific onshore producing petroleum basin, and the Surat Basin in Queensland
• Hydrogen industry is expected to grow rapidly, owing to probable hydrogen usage in the transport and power industries
• Recently, Real Energy established Pure Hydrogen Corporation Pty Limited and entered into a binding Scheme Implementation Agreement with Strata-X Energy to become Pure Energy
• Pure Energy has the goal to create the next ASX energy growth stock, and its targets are lower emissions and joining the hydrogen economy

Australian Federal Government provided its road map for the country’s National Hydrogen Strategy in November 2019. The strategy envisions a clean, innovative, and competitive yet safe hydrogen industry that not only benefits Australians but positions it as a key player by the year 2030. More recently, in May 2020, the Fed committed to invest $300 million in Australia’s emerging hydrogen industry.

In line with the road map, Board of Australian east coast focused gas company Real Energy Corporation Limited (ASX:RLE) has been assessing opportunities for hydrogen. Managing Director Scott Brown acknowledges the Fed’s commitment to the sector and gauges enormous potential to develop a hydrogen industry in Australia.

Real Energy’s project portfolio comprises of-

• Project Venus: 100% CSG Walloon Surat Basin – 694 BCF
• Windorah Gas Project: 100% Cooper Basin basin-centred gas – 8.8 TCF/ 770 BCF 3C

Why Hydrogen?

According to the Australian Government, the country’s future energy system will require clean, flexible, storable, safe fuels. Hydrogen offers all of these characteristics and seems to be an ideal clean energy solution to help power Australia.

Kalkine Image (Source: RLE and Australia Govt Reports)

Hydrogen is likely to be used in transport- particularly buses, trucks and cars, and to power industry in general. Recently, automakers like Toyota, Hyundai, Honda and Audi have either released models or are in the planning stage to release models that are powered by hydrogen fuel cells.

Casting an eye on Real Energy’s added advantage- the two main ways of making hydrogen are either processing natural gas or via electrolysis (converting water to hydrogen). The Company’s existing gas resources could be used to provide gas feedstock for a natural gas to hydrogen plant. Moreover, wastewater from dewatering coal seam gas field of Project Venus could also be used for hydrogen production.

Real Energy Uncovers Hydrogen Opportunities

Pure Hydrogen Corporation Pty Limited

In May 2020, the Company established Pure Hydrogen Corporation Pty Limited, a wholly owned subsidiary, to undertake a detailed scoping study to assess the commercial viability of building, owning and operating a hydrogen fuel plant in Queensland. This Corporation made headway, earmarking two potential sites in Queensland, at which to establish a large-scale hydrogen fuel plant with a minimum annual production capacity of 36 million kilograms. Reportedly, a plant of this size can possibly power 240,000 Hyundai Nexo’s for a year.

Besides, potential project sites are under review in the Surat Basin and near Gladstone with scoping studies likely to be performed.

Mr Brown states-

“With the Federal Government also committed to this sector, we believe our investment and commitment to these scoping studies is appropriately timed”.

Pure Energy

A merger of equals creates a very high potential and diversified gas portfolio. Real Energy entered into a binding Scheme Implementation Agreement with Strata-X Energy Limited (ASX:SXA) to pursue a nil premium merger. The compelling combination would create Pure Energy- a material gas business with significant holdings in the Surat and Cooper Basins, Queensland.

Pure Energy holds the potential to become a meaningful gas operator in the east coast of Australia and the next ASX energy growth stock. It is likely to leverage from huge resources in three gas projects- besides two from Real Energy’s portfolio (discussed above), an addition would be Strata-X Energy’s Serowe CSG Project, Botswana, Africa, with 2.38 TCF of Prospective Resource and 23 BCF 2C.

In total, Pure Energy will have 11.8 TCF of Prospective Gas Resources, 770 BCF of 3C and 353 BCF of 2C Contingent Gas Resources.

MUST READ- Real Energy and Strata-X Energy Host Joint Webinar Underscoring Pure Energy

Pure Energy’s vision is to initially lower emissions via substitution of methane for coal and diesel. It is also inspecting feasibility of building a methane to hydrogen plant in Gladstone. Another goal is to convert methane to hydrogen and value add graphite products via a hybrid methane pyrolysis method.

To know more about Pure Energy, READ HERE- Compelling Combination! Pure Energy to Form Via Real Energy and Strata-X Energy Merger

Meanwhile, Real Energy continues to advance Project Venus and extract value from the Windorah Gas Project.

RLE quoted $ 0.020 on 6 August 2020.

(Note: All currency in AUD unless specified otherwise)