Seven things every investor needs to know about Provaris Energy

Seven things every investor needs to know about Provaris Energy

With global CO2 emissions currently estimated at more than 36bn metric tonnes* per year, every developed and emerging economy needs to undergo an immense transition to meet net-zero emission targets by 2050.

Commentators agree that there is no magic bullet for a solution, but hydrogen is becoming the go-to fuel and is expected to play a vital role in the transition to a net-zero energy system.

Reports suggest that demand could grow sixfold by 2050, with its use expanding to transport, shipping, aviation, heavy industry and power generation.

Meanwhile, despite forecasts of rising demand, no business has published an intention to transport compressed green hydrogen – at scale – on an inter-continental basis.

That is until Provaris Energy. Provaris is planning to be the world’s first market-listed provider of compressed green hydrogen by sea from Australia to high-demand hubs in South-East Asia, and via key energy transition ports in Europe.

For a full insight into the business, read Edison’s latest report. Or, for an overview, here are seven things every investor should know about the company.

#1 A first mover
Recent geopolitical instability and energy security fears are accelerating hydrogen adoption. By 2050, the International Energy Agency estimates that global demand for hydrogen will increase to 528Mt, with green hydrogen’s share set to increase from 5% to 62%. Provaris has the potential to be one of the first companies to offer emission-free hydrogen production and an inter-regional green hydrogen supply chain.

#2 The H2Neo: A new class of bulk hydrogen carrier
Provaris is making material strides towards its goal of producing and supplying green hydrogen by 2026. Central to the company’s plans is the development of a new class of ocean-going delivery vessel, the H2Neo carrier, which will transport compressed green hydrogen to the regional markets in Europe and Asia.

#3 Shipbuilding schedule
With preliminary shipping approvals in place and significantly advanced in relation to engineering, management is targeting approval for construction of the first H2Neo carrier by mid-2023, with the first operation of vessels in 2026, providing first-mover advantage.

#4 From tropical Australia to markets
The company has lodged a referral submission for its proposed 2.8-gigawatt Tiwi H2 project in northern Australia, strategically located within short shipping distance of Japan, Korea and Singapore. This will be the company’s base for its green hydrogen production and exports, with the hydrogen produced through electrolysis of purified sea water and the process powered by solar energy.

#5 Climate action in action
Production volumes from the Tiwi H2 project are expected to reach 100,000 tonnes of green hydrogen per year when it commences exports in 2026. This production is equivalent to saving c 1.3Mt per year of CO2 emissions.

#6 European markets ideally suited to embrace compressed hydrogen
In addition to the Asia market opportunity, Provaris is supporting a number of hydrogen producers targeting key markets in Europe, with import demands of 10Mt per year required by 2030.

#7 Rate of return modelled
Edison’s IRR modelling for Provaris is based on two fleets of different-sized H2Neo vessels, one of 430t and one of 2,000t – the long-term target vessel size. The 430t vessel fleet offered IRRs of 10–12% with the larger vessels offering average IRRs of 16–17%.

For more information visit Edison’s profile page for Provaris Energy and read the latest update.

*Source: IEA, Global Energy Review 2021

Want to receive content on Provaris Energy? Complete the form below.

IMPORTANT DISCLOSURES

Edison offers investor relations, consulting and research publication services to paying clients. In accordance with Section 17(b) of the US Securities Act of 1933, please note the following important disclosures relating to Edison and its client relationship with Provaris Energy (the “Company”).

Edison is engaged by the Company on a paid basis for investor relations services and this communication relates to those services. In connection with its investor relations engagement by the Company, Edison’s standard fees are $20,000 per month. Additional compensation may have accrued since the publication of this notice.

In addition, Edison is engaged by the Company to separately provide investment research coverage of its stock. In connection with its investment research coverage, Edison’s standard fees are £60,000 pa. Additional compensation may have accrued since the publication of this notice. No compensation relating to Edison’s investment research coverage is in any way contingent upon any positive opinions or conclusions in its research reports.

Edison’s investor relations services are independent of its research services, although Edison’s investor relations activities may utilize published Edison research as a source, among others, in connection with its activities. Edison’s investor relations and investment research personnel regularly, but separately, interact with the Company. All source materials relating to any investor relations materials of Edison should be considered to be directly attributable to information provided to Edison by the Company or the third-party sources noted in the communication. While third-party information used in the publication of Edison’s communications is typically compiled from publicly available sources that are believed to be accurate, complete and reliable, Edison does not guarantee the accuracy or completeness of information contained therein, and typically does not independently verify such information.

NOTE THAT ALL INVESTMENTS ARE SUBJECT TO INHERENT RISK AND ANY INVESTMENT IN THE COMPANY IS SUBJECT TO SIGNIFICANT RISKS THAT SHOULD BE ASSESSED BY ANY INVESTOR AND THEIR ADVISORS. PLEASE CLOSELY REVIEW THE COMPANY’S AVAILABLE PUBLIC DISCLOSURES, INCLUDING RISK FACTORS FOR SPECIFIC CONSIDERATION, WHICH ARE AVAILABLE THROUGH THE COMPANY’S INVESTOR RELATIONS WEBSITE, LINKED ABOVE.

This communication may include forward-looking statements that are subject to risks and uncertainties. Factors that could cause a company’s actual results and financial condition to differ from expectations include, without limitation: political uncertainty, changes in general economic conditions that adversely affect the level of demand for the company’s products or services, changes in international and domestic financial markets and in the competitive environment, and other factors relating to the foregoing. All forward-looking statements relating to this communication are qualified in their entirety by this cautionary statement.

Edison is neither a FINRA-registered broker-dealer nor an SEC-registered investment adviser and does not provide any investment advisory or banking services. Edison’s investment research reports are bona fide publications of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. Edison does not offer or provide personal advice and its research provided is for informational purposes only. No mention of a particular security in any Edison communication constitutes a solicitation or recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison’s policies on personal dealing and conflicts of interest.

Deutsches Eigenkapitalforum (EKF) 2022

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free