Dear shareholders,Provaris has been a hive of activity over the...

Dear shareholders,

Provaris has been a hive of activity over the last two months, May commenced with important funding news via a strategic standby financing initiative with Macquarie Bank, in the form of a two-year $3 million convertible bond facility. Alongside the facility the Company is in the process of finalising a $1 million Share Purchase, both of which will support our progress on further commercial agreements related to the ongoing development of hydrogen supply chains in Europe based on the Company’s hydrogen storage (tanks and barges) and marine carriers. Our delegation at the World Hydrogen Summit in May also generated several new commercial and technical opportunities as the event was a showcase for increasing the awareness of our development over the past year and the level of engagement made it clear that our unique approach is being closely watched by many in the industry given the large market opportunity can unlock.

As highlighted in our Shareholder Letter we continue to experience an increase in engagement with both hydrogen suppliers and off-takers in 2024 based on the scarcity of gaseous green hydrogen supply being available for import. Provaris provides a simple and capital efficient approach to developing supply chains in the European region, at a scale that is aligned with industrial demand scaling up. The lack of ammonia receiving infrastructure and uncertainty on costs for crackers continues to be a driver for the German utilities we are working with to support the development of compressed hydrogen supply chains as a viable alternative ammonia or other carriers. Germany needs to secure future hydrogen supply to cut emissions from industrial sectors while reducing reliance on natural gas, with plans to import up to 70% of its hydrogen demand in 2030.

This commercial support for Provaris comes at an opportune time, as the EU continues to direct funds towards the development of critical hydrogen infrastructure to enable industrial sectors, such as steel, to decarbonise. Last week Germany received approval by the EU for a €3 billion plan to build out a hydrogen core hydrogen network connecting several EU member countries. The 9,700km core hydrogen network (pipeline) will connect production centres with industrial users, storage facilities, power plants and import corridors. The first major pipeline is expected to be operational from 2025, with completion of the entire network expected by 2032.

We continue to hold a dialogue with several German port operators and utilities for a suitable location for the import of hydrogen using our H2Neo carriers. Provaris is already strategically positioned for the Port of Rotterdam with a proposed import terminal development with GES at a location adjacent to Gasunie’s pipeline (Hynetwork) in the port now under construction for operation in 2027. The Hynetwork grid for Netherlands will be complete by 2030, with a connection to the border to link up with the German core network.

Increased certainty in the development and funding of the core network will be a catalyst to see more end user demand for supply and offtake, and in late June Salzgitter, German’s 2nd largest steel producer, announced a tender for up to 150,000 tons of hydrogen supply annually delivered to the Salzgitter location by pipeline. The steel maker has already signed a preliminary deal to source 20,000 tonnes from German utility Uniper from 2028 — subject to the construction of a pipeline connection from Denmark.

Closer to home (being our Norway one)… we were delighted to see Norway’s support for the decarbonisation of the coastal maritime industry with Enova SF, a Norwegian Government agency, awarding 1.2 billion NOK (~USD 120 M) to six shipping companies for the construction of 9 hydrogen and 6 ammonia fuelled ships. This funding supports the integrated development of compressed hydrogen as fuel for maritime transport, including hydrogen supply, hydrogen storage and fuel gas supply systems, and hydrogen storage and bunkering hubs in Norway. We view the potential of each hydrogen fuelled ship as a potential customer for our hydrogen bunker tanks under development.

Provaris continues to target 2028 for a bulk-scale maritime solution and is working with German utilities, including Uniper, to identify and develop alternative supply chains required for a portfolio of gaseous pipeline-ready hydrogen to supply the downstream industrial users. For more details, please contact our CEO and Managing Director Martin Carolan, Business Development – Europe Mats Fagerberg and Chief Technical Officer Per Cato Roed.

Finally, we continue to be in dialogue with Prodtex and the secured lenders involved with the facility at Fiska, Norway, regarding the continuation of our Prototype Tank. Proposals for the restart of development activities are in progress and we will update shareholders and our stakeholders as soon as possible on the updated schedule. We also thank all of the shareholders for their participation in the SPP offer, and the group of shareholders providing underwriting support, with the offer scheduled to settle next week.

Martin Carolan
Managing Director & CEO
Provaris Energy

I’m sorry but this sounds desperate now. Refer newsletter.