Hazer Group (ASZ:HZR) Commercial Development Project - commencement of site works


by Michael Luu

Hazer Group Limited (ASX:HZR) CEO & Managing Director Geoff Ward provides an update on the company's Commercial Development Project at the Woodman Point Wastewater Treatment Plant south of Perth, a 100 tonne per annum hydrogen production facility using waste gas produced through the water treatment facilities.

Michael Luu:
Hi. This is Michael Luu for the Finance News Network. Joining me from Hazer Group (ASX:HZR) is the company CEO and Managing Director Geoff Ward. Hi, Geoff. Welcome back to the network.

Geoff Ward: Hi, Michael. Thank you.

Michael Luu: Now, first off, Hazer is developing its commercial demonstration project (CDP) at the Woodman Point Waste Water Treatment Plant south of Perth. Could you share some more detail?

Geoff Ward: Sure. So, the CDP is the first fully integrated, scaled up industrial application of our process. So, the first time we've put all of the components together to continuously operate. As shareholders and viewers may know, we took a final investment decision in July last year, appointed Primero Group as our EPC partner for the project. We secured all required permitting by the end of 2020. We're now approximately 80 per cent of the way through detailed design. So, we're remaining on schedule for an end-of-2021 completion of construction and commissioning at year end. Challenging schedule in the COVID environment, but the team's working hard to minimise any slippages.

Michael Luu: Geoff, can you remind us about the business opportunities that the graphite and hydrogen markets offer?

Geoff Ward: Hydrogen is obviously seen as key to decarbonising the economy and for all industrial economies to have any chance of making their nationally determined Paris Climate Agreement commitments. So, hydrogen plays a role in decarbonising heavy industry. Decarbonising the inputs to the manufacturer of petrochemicals, fuels, ammonia, urea, decarbonising steel. It's also key to decarbonising heavy transport, with applications in long-distance haulage, in ferries and maritime applications. And it's also key to decarbonising the grid even further than we've achieved so far with wind and solar alone. So, it'll allow us to store that energy, use it when we need to, move it around, transport it. And that's why major investment banks and the research houses are now identifying multi-trillion dollar investment programs. Graphite has similar themes, energy storage, advanced materials, lower emissions. Graphite has applications in battery minerals applications, in the manufacture of electrodes. There's surprisingly a large market for green steel and green aluminium and other modern metals manufacturing. But also can be used in refractories, in lubricants, water treatment processes. So, a wide range of applications, which we're investigating through our research and development program with the University of Sydney.

Michael Luu: You touched on carbon emissions reduction before. How is the plants positioned in terms of its environmental contribution?

Geoff Ward: Well, the Hazer process is a very environmentally friendly process. We're described as a methane pyrolysis technology. So, we take a methane or natural gas, we take a gas-based feedstock, and we turn it into hydrogen and solid carbon. And, in fact, when we operate on biogas, so when we take methane that's originated in a waste water treatment plant, like we're doing at Woodman Point, or a landfill, or a large agricultural waste facility -- when we use that as our feedstock, then we're actually carbon negative. So, we're capturing carbon that was produced organically through animals, through humans, and we're taking that out of the system. So, we can actually be a carbon negative production process for hydrogen.

Michael Luu: Can you talk us through your finances?

Geoff Ward: We're lucky to be well-funded to get through this critical step-up in building the first demonstration project. So, we're fully funded to build the CDP, to pursue our exciting R&D program and also to maintain the dialogue, the engineering studies and the works we're doing with our international business development partners. So, our funding comes from a mix of grant funding. We were very fortunate and grateful to receive $9.4 million of grant funding from the Australian Government through ARENA, the Australian Renewable Energy Agency. We have a senior secured debt facility, secured against our future R&D payments, of which we've drawn $2 million out of a $6 million facility. And we're also then very grateful for the strong support of shareholders. In 2020, we went to the equity markets and we had an oversubscribed capital raising, which allowed us to commit to building the project. And, since that time, we've been delighted to actually welcome AP Ventures as a strategic investor. They're a London-based specialty hydrogen venture capital fund, probably the only hydrogen specialist fund in the world. So, we're delighted to welcome them and be able to access their knowledge and network also, as well as the funding that they offered.

Michael Luu: Geoff Ward, thanks for the updates, and we look forward to receiving more news flow from the company in the future.

Geoff Ward: Thank you very much, Michael.