Provaris reckons it can crack the hydrogen export challenge

‍London | Rio Tinto’s chief scientist Nigel Steward caused a few ripples late last year when he suggested that shipping hydrogen long distances was potentially just as harmful to the climate as burning natural gas.

There are companies and countries, including Australia, that are betting on green hydrogen – produced with renewable energy – as the short-cut to a net zero future, and to a new and booming export industry.

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If Steward is right, those bets might never end up paying off. Companies like Riowill surely use green hydrogen close to where it is produced. But the high seasmight never host the anticipated armada of hydrogen-bearing tankers, shippingclean, green Aussie H2 all over the world.

Unsurprisingly, some of those who have punted on green hydrogen exports are pushing back against Steward – not least Fortescue’s Andrew Forrest.

He brandishes a sheaf of scientific papers which conclude that as long as only minimal amounts of hydrogen leak into the atmosphere each day, the green stuff is miles better for the climate than any carbon-based option.

As with everything he does, Forrest seems very confident that Fortescue’s plan to ship hydrogen as synthetic methane, using modified LNG tankers, will succeed, and will kick some serious greenhouse goals.

He’s already investing in German port infrastructure to receive H2 molecules made with Australia’s abundant sunshine.

A more immediately available option is to ship hydrogen as ammonia. But once you’ve turned hydrogen into ammonia, it probably makes more commercial sense to sell the ammonia than to go to all the trouble of turning it back into hydrogen at the other end.

Lurking in the shadow of Forrest and other hydrogen-export plays, there’s anotherAustralian company – one that almost never makes the news – which is plotting a different way to get the green hydrogen export dream off the drawing board.

Provaris, which until last May was known as Global Energy Ventures, is eschewing the mainstream options of ammonia (NH3) and liquefaction (LH2) – which often involves keeping the hydrogen at punishingly low temperatures – in favour of shipping it as a compressed gas (CH2).

Four years ago, GEV’s big idea was to ship compressed natural gas, offering a cheaper and less capital-intensive alternative to LNG over shorter-haul distances. In 2021 it pivoted its tanker designs to compressed hydrogen instead.

Provaris argues that CH2 is both cheaper and more energy-efficient than NH3 orLH2, because whatever the leakage rates during shipping, you eliminate the need to convert and reconvert the hydrogen at each end. All you have to do is compress and decompress.

But before we resurrect Australia’s green hydrogen superpower dreams in toto, there’s a catch: Provaris’ ships would carry hydrogen over relatively shorter distances.

The company’s H2Neo, which would hold 26,000 cubic metres of CH2 per shipment, will have a range of 2000 nautical miles (about 3700 kilometres). TheH2Max, with a capacity of 120,000 cubic metres, will cover 3000 nautical miles.

To map that onto an atlas: from northern Australia, the H2Neo makes it about as far as Singapore or just beyond – an important market, but not necessarily a huge one.

The H2Max could reach Korea and Japan, which will surely be deep markets forAussie green hydrogen – Provaris CEO Martin Carolan says it’s a question of “when, not if” – but probably not for quite a while yet.

Provaris’ original plan was to make its own green hydrogen, using a site it hopes to develop in the Tiwi archipelago north of Darwin, and ship it to these molecule-hungry Asian markets.

It is still pressing on with that, but Carolan says he is looking “to bring in a partner into that project, as clearly it has ongoing larger capital commitments as you de-risk the project towards an investment decision”.

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European ambition

Meanwhile, he is eyeing off the European appetite for green hydrogen. Earlier this month, Provaris signed an MOU with Norwegian Hydrogen – a company that wants to capitalise on Scandinavia’s abundant renewable energy to make green hydrogen and ship it to the rest of Europe, using Provaris ships.

Provaris has now opened an office in Oslo. The pair are working together on picking out production and export sites in the Nordic countries, and developing a supply chain that feeds the big potential hydrogen-receiving ports in Germany and the Netherlands.

Carolan says Provaris is looking at a couple of other tie-ups like this, in keeping with the idea that economically viable green hydrogen supply chains are going to be regional rather than global.

That would suit the short-haul nature of Provaris’ technology. Now, the company just has to get the ships on the water.

In December, the American Bureau of Shipping gave design approval for the H2Neo, which the company says paves the way to execute shipbuilding contracts by the end of the year and have vessels operational by 2026.

“It’s basically approved for construction, subject to a prototype testing phase,” Carolan tells The Australian Financial Review. “That’s a major proof point ... basically it’s a design and constructability test which is left to go.”

The company doesn’t see the H2Max reaching the shipbuilding phase until 2026, with the vessels getting seaborne in 2030 – around the same time as north-east Asian demand might really fire up.

One thing Carolan does share with Forrest is confidence. “The benefit case of eliminating the big hungry energy processes, of the shorter distance, of there being less shipping required – we think we can get this up and running, certainly well before 2030,” he says.

That means the Australian company’s ships might be plying waters in Europe before we actually see them Down Under. But at least Australia’s green dream is still alive.