Provaris Energy Ltd (ASX:PV1) has achieved a significant milestone by securing the class ‘design approval’ for its H2Neo compressed green hydrogen carrier from the American Bureau of Shipping (ABS), according to Edison Investment Research.
Edison said the approval opens the way for Provaris, assisted by shipping expert Clarksons, to seek a shipyard to quote for and construct the carrier.
The novel vessel design gives Provaris a first-mover advantage in large-scale hydrogen transport solutions and paves the way for the much more cost-effective H2Max vessel, which has five times the capacity.
The following is an extract from the research update:
H2Neo approval opens door for commercialisation
Class approval of Provaris Energy’s novel H2Neo green hydrogen (GH2) carrier is a significant milestone for the company, which will now proceed to the selection of a shipyard for construction and to accurate budgeting. It provides a much clearer time scale for delivery, expected to coincide with the first available cargo at the end of 2026. The novel design points to Provaris having significant first-mover advantage in the compressed hydrogen-at-scale space. It will also highlight the advantages of compression over more costly and less carbon efficient transportation solutions. Finally, the H2Neo, if successful, paves the way for the H2Max vessel, which is five-times larger and has true scalability.
Development of Tiwi H2 Project and Total Eren MoU
In addition to the class approval, Provaris Energy continues to make progress at the Tiwi H2 Project, its clean energy and H2 production development on the Tiwi Islands off the Northern Territory in Australia, which may ultimately provide upstream volume for the H2Neo carriers. In addition, Provaris previously (in 2022) entered into a memorandum of understanding (MoU) with Total Eren to co-operate on the development of its compressed H2 supply chain in both Asia and Europe, with initial projects identified for investigation.
Valuation: ABS approval adds to confidence
The ABS ‘Design Approval’ sets a clear course for development of the H2Neo vessel. The next key milestone would be the signing of an offtake agreement, which would add even greater confidence to the commercial viability of Provaris’ ambitious projects. Our modelling, which produces internal rates of return of 9.7– 18.7% from a range of scenarios and vessel sizes, remains robust. We would revisit this in the event of an offtake agreement being announced. We consider this as being likely, given the exponential growth in demand for GH2 forecast by the International Energy Agency.