This is an interesting development for PH2. On the one hand...

This is an interesting development for PH2. On the one hand Sarawak Economic Development Corp plans to produce an initial 1000 tonnes of hydrogen per year as part of its hydrogen economy strategy. Production would ramp up to 10k tonnes and scale to over 50k tonnes over the decade. The idea is to export hydrogen and develop a hydrogen rail and vehicle network. They already have hydrogen busses. So it makes sense for H2X to expand into Sarawak, and extend into Malaysia itself. PH2’s 24% stake in H2X is beneficial as it will gain experience in Sarawak and hopefully gain a foothold in hydrogen production and distribution.

Noting that on the other side of Borneo, Indonesia is moving its capital to the island, I would be surprised if PH2 and H2X are not investigating opportunities there too. Imagine being involved in building major city from scratch by developing hydrogen infrastructure. Fortescue is already involved in Indonesian initiatives, so it is not too much of a stretch to consider other players seeking interest in the development market there.

This could be huge if PH2 and H2X become intertwined with Sarawak’s and Malaysia’s hydrogen economy future. Sarawak only has around 2 million people, so the wider expansion into the Malaysian peninsular is the main goal in my mind. This is a good starting foothold.