MEL (ASX) Ann: Metgasco to acquire renewable hydrogen production technology

Originally posted by hanabi: ↑

And I’m not sure they will need government grants

It's a bit early to say either way, however, Patriot themselves are stating (in an indirect way) that the process is currently not commercially viable in terms of electricity production vs diesel generator, and won't be viable for some time:

Perhaps the inclusion of biochar and carbon credit sales will make each unit commercially viable sooner (?). However, reading further:

So I may be wrong but it seems they currently can't produce electricity. That just leaves the sale of biochar, syngas/hydrogen, and carbon credits to make the project commercially viable. Stage three of the proposed acquisition requires diesel replacement (with syngas?) and power (= electricity?) generation to be commercially viable prior to our vote, and the vote is prior to the end of this year (if I am not mistaken), so I am not sure how they are going to get this over the line if they can't produce power, and diesel replacement won't be profitable until 2025. On the other hand, MEL specifically mentions power delivery in stage three of the acquisition, so that seems contradictory to what Patriot are saying.

It also seems they are not selling these Patriot units to KCE, they're remaining owner/operator and will simply sell power to the customer via a PPA. That leaves all the commercial and operational risk (manufacturing these units and running them profitably, including maintenance) falling on MEL, and it also suggests each unit produced will have to be paid for by shareholders or loans before they are deployed and start generating an income stream. Personally I don't think this capital-intensive financial model is appropriate for a small company like MEL. Selling units outright at a profit would be fine, because that provides the funding for the next unit's manufacture, but dept/equity funding each new unit and then having to pay for operation and maintenance, and in return receiving a small income stream over x-years?? I've already been a shareholder in a company that used this model (RNE, biogas assets) and it was an abject failure and a very costly mistake for shareholders. In fact it almost bankrupted the company.

Sorry to say that at this stage there are too many unanswered questions for me to be able to support this acquisition. Perhaps MEL will release more details of the plan prior to the meeting.

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the most sensible and logical posts ive seen for a while...

Originally posted by huaneng: ↑

@ ai99

one 11 years old example how to make diesel (which is very energy intense) from straw (which is not very energy intense) --- ( so what do you think is the physical problem there?) And hydrogen is even more complicated to store for example...

To read this old sundiesel, choren story (when memory serves, Shell was somehow involved there as well) you will need probably google translate
https://www.wiwo.de/unternehmen/unternehmenspleite-aus-fuer-den-holzdiesel/5307676.htmlperhaps some Chinese have read this story as well lol

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same with your posts...vielen dank

@Al99 it would pay you to learn german, you will benefit from it. And if that fails, you can always google translate. Germany is the home of many chemical processes that have revolutionised the world. They dont do things by halves and smoke and mirror merchants get found out.
As for failures...Babccok had a cock up of a waste to energy plant...but they made lots of money out of it...selling it to stupid shareholders...like me.

Unless they pull a rabbit out of the hat, im a little puzzled as to why on earth they will choose to pump up to $6m into this and exposing the company to a different, and significant operational risk going into the future.

Stick with your knitting they say. Why don't they focus on the oil and gas business (i think i may know the answer to this)? they will be getting god cash flow soon, why don't they farm into some good ground...and not one off "cervantes" things either.

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Ann: Metgasco to acquire renewable hydrogen production technology, page-65

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