- BPH Energy (BPH) and its partially-owned subsidiary, Advent, are planning to acquire a 10 per cent stake in Clean Hydrogen Technologies (Clean Carbon)
- The company signed a binding term sheet with Clean Carbon which is a US-based company focused on producing ‘turquoise hydrogen’ through its own patented process
- BPH has been assessing investment opportunities for clean energy solutions as the world is shifting towards hydrogen production over relying on hydrocarbons such as coal and oil
- Subject to shareholder approval, the companies will pay a US$1 million (A$1.4 million) for 10 per cent in Clean Carbon with BPH owning 8 per cent and Advent owning 2 per cent
- BPH shares have fallen 27 per cent to trade at 2.7 cents at 11:33 am AEST
BPH Energy (BPH) has announced plans to invest in Clean Hydrogen Technologies (Clean Carbon).
Clean Carbon is a hydrogen technology company who has successfully produced clean hydrogen, achieving on average a 92 per cent cracking efficiency.
BPH said it has been assessing new investment opportunities for cleaner energy solutions during a time where there’s a global transition from hydrocarbons such as coal and oil to hydrogen.
Although natural gas also presents continued growth, it too will need to become an energy with no carbon emissions.
Clean Carbon overview
Clean Carbon’s method is processing (not burning) methane using its patented product and a modified fluidised bed reactor to produce what is known as ‘turquoise hydrogen’.
While this process, known as the pyrolysis process, has reportedly been used by the oil industry for years, Clean Carbon’s method is unique in its efficiency of cracking the methane into turquoise hydrogen with no carbon emissions. What also sets it apart is the quality of the carbon black produced being mainly conductive carbon with some carbon nanotubes.
This process requires similar energy needs as steam methane reforming (SMR) which is the main process used around the world to produce hydrogen. However unlike the SMR process, Clean Carbon’s process produces hydrogen at a similar prices and doesn’t require any water.
Clean Carbon’s solution is reportedly being built to work downstream at heavy transport fuelling hubs in the US, mid-stream at steel plants to replace coking coal, and upstream where the natural gas is processed into hydrogen.
Term sheet
BPH Energy and its 36.1 per cent-owned subsidiary, Advent Energy, entered a binding term sheet with Clean Carbon to subscribe for 10 per cent of the total issued share capital of Clean Carbon.
In late November 2021, BPH and Advent paid the vendor a $25,000 non-refundable deposit and, subject to shareholder approval, BPH will make a cash payment of US$800,000 (A$1.1 million) and Advent will pay US$200,000 for the issue of the subscription shares.
Once this payment is made to the vendor, 8 per cent of the subscription shares Tranche 1 shall be issued to BPH and the remaining 2 per cent issued to Advent.
Additionally, the companies could claim another 10 per cent in Clean Carbon if the vendor seeks more funding for the development and operations of its technology on or before December 31, 2022. If it chooses to, it must first offer BPH and Advent the right to subscribe for additional subscription shares on the same terms and conditions as the first tranche.
In this case, BPH’s interest in Clean Carbon will increase to 16 per cent and Advent’s to 4 per cent.
The vendor will reportedly use the consideration funding to develop and test a reactor that can produce at least 3.2 and as high as 15 kilograms of hydrogen per hour and to submit at least two new patents in an agreed region relevant to the production of hydrogen from proprietary technology.
A general meeting seeking shareholder approval is scheduled to be held in late June.
BPH shares fell 27 per cent to trade at 2.7 cents at 11:33 am AEST.