Hexagon Energy Materials (ASX:HXG) has inked a non-binding early-stage indicative gas supply agreement with Chevron for its WA-based clean ammonia project.
Notably, the company’s ‘WAH2 Project‘ was originally meant to be a green hydrogen project – thus its name – but in recent history as enthusiasm for that alternative fuel wanes, the extant ammonia component has become the main focus.
Andrew Forrest, chief of Fortescue Metals Group (ASX:FMG), earlier this year wound up his hydrogen division back into the main company. It had been spun out as Fortescue Future Industries (FFI), but that doesn’t exist anymore.
This was directly referenced in a letter by relatively newish Hexagon CEO Stephen Hall in a letter published in August this year – but not released to the ASX. A hyperlink to that letter is currently not working on the company’s website. (The user is led to a ‘get in touch’ page.)
But secondary sources (a fertiliser industry trade publication) indicates Hall’s letter ultimately reiterated support for ongoing pre-FEED studies and commercial agreements that would push the project into the next stages of development.
The non-binding gas supply deal with Chevron appears to be proof of that strategy.
“The Indication for gas supply is a demonstration of the growing confidence in the viability of the clean ammonia business in Australia and its ability to supply the critical energy and bunkering market,” Hexagon Chair Charles Whitfield wrote.
By bunkering markets, he means supplying ammonia to oceanic tankers using the material as a fuel instead of marine fuel to cut back on emissions.
This is an ambitious strategy – a recent study looking at ammonia-fuelled shipping broadly identified 400 risks across cost and safety. (And, ongoing strife in the Red Sea has seen global shipping emissions hit all time highs – at once a justification and challenge to the tech.)
HXG last traded at 2.2cps.
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