Hazer, by the numbers

Have been running some numbers to try and get a bit of a handle on the potential should Hazer get a single full scale plant up and running and though that others may find them interesting. The assumptions are generally on the conservative side. A plant of this size would produce 12,000 tonnes per year of Hydrogen and 64,000 tonnes or graphite. On a world market scale this represents 0.02% of the existing hydrogen market and 5.3% of the graphite market so quite easy to imagine that any products produced have a pathway to market.

Assumptions:

1. Plant scale as per prospectus, 84ktpa feed
2. Hazer process OPEX will be similar to Steam Methane Reforming plant (in reality the Hazer process should be less expensive due to the lack of steam raising equipment required and lower comparative process pressure)
3. Graphite produced will not be of the highest grade therefore attracting around $1000/tonne (quite likely that graphite produced will be higher grade)
4. Hydrogen is priced at $1/kg which is around half the price of the closest competing method
5. Methane feed will be purchased at market rate (if landfill or stranded methane are utilised this will be lower)
6. Plant depreciation factored over 15 years

From the calculations above it is apparent that at $1 per kg for hydrogen and graphite the Hazer process is profitable, when compared to other hydrogen production methods in the table below you can see that the nearest competing method would require a significantly higher price just to break even. The most commonly utilised process in industry is the NG reformation method and the most commonly utilised method for smaller scale projects e.g. vehicular fuelling stations is electrolysis. Hazer stacks up very well against both.
In summary the Hazer process appears to be able to produce both hydrogen and graphite at a price point that ensures a return on investment of close to 70% or ~$50 million p.a while undercutting any competing methods. IMO once scale up is proven there is very little standing in the way of significant revenue here.

A single full scale operational plant would IMO justify a MC of around half a billion dollars and still only make a small dent in the world markets for these commodities which leaves room for multiple plants

Easy to see why the sell side remains so light.

IMO, DYOR, Not investment advice etc.