Tlou Energy Provides Hydrogen Production Project

Source: 11/11/2021, Location: Africa

Tlou Energy Limited is focused on delivering secure, sustainable, and clean power solutions in Botswana and sub-Saharan Africa. At the Lesedi Power Project ("Lesedi") Tlou and hydrogen technology partner Synergen Met are working on combining large, established natural gas reserves with abundant solar energy to produce green hydrogen, thus providing a complementary range of cleaner and greener power generation options.

Key Points:
Ř Green Hydrogen production planned at Lesedi in 2022
Ř Prototype Engineering proceeding to schedule
Ř Net Zero CO2 emissions potential and the possibility to generate Carbon Credits
Ř Synergen Met IPO planned in the coming months

The Company has secured a 10MW Power Purchase Agreement (PPA) with Botswana Power Corporation, and power dispatch under this PPA will help displace existing carbon-intensive power. The construction of transmission lines to connect Lesedi to the existing power grid is expected to be completed in 2023.

The prototype hydrogen production unit is being designed, built and tested in Brisbane prior to transportation to Lesedi in 1H22, when production trials will commence. The successful production of hydrogen and solid carbon products could allow the Company to achieve early-stage revenue ahead of gas-to-power revenue under the 10MW PPA.

Hydrogen Prototype Design
The Company's hydrogen technology partner Synergen Met Pty Ltd ("SM"), a leading specialist in plasma torch and pyrolysis technology, has informed the Company that preliminary engineering for their hydrogen-carbon production process has been completed. The plasma torch will be tested and configured to optimize hydrogen and solid carbon production.

A consultant engineering company (Kemplant) has been engaged to assist with the prototype engineering to allow detailed design and fabrication to commence. Testing of the plasma torch to determine the optimum parameters for the production of hydrogen and solid carbon is progressing.

Net Zero CO2 emissions potential
Once the prototype arrives at Lesedi it will utilize Tlou's existing gas flows to produce hydrogen and solid carbon by-products. Net Zero CO2 emissions potential will be achieved following the planned addition of Solar PV energy.

The use of plasma technology for hydrogen production will be a first for the sub-Saharan region and could have major implications for the production of low emissions, clean energy across the region - similarly in the related fields of waste-to-energy and waste disposal.

Tlou and SM intend to use the hydrogen produced from the prototype to generate electricity and possibly for transport fuel (initially in Tlou's own vehicles). Solid carbon will be made available for regional consumers that require the product. World markets for hydrogen and solid carbon black are predicted to expand considerably over the short and medium term.

SM consider that their process meets the definition of green hydrogen production via their plasma torch gas pyrolysis design.

Synergen Met IPO
SM is planning to list on the ASX in the coming months and is currently going through the pre-IPO process. Should this proceed, under the Heads of Agreement between Tlou and SM, Tlou may participate in the IPO for up to US$3m. The Company sees significant upside for a potential investment in SM given comparisons with similar listed entities.

Tlou not only sees considerable scope for Tlou's hydrogen and solid carbon products within sub-Saharan Africa but also for SM's technology in relation to waste disposal. Rendering of otherwise toxic waste into inert products, or otherwise landfill organic waste into energy, is intended to form a central pillar of SM's objectives using their unique plasma technology.

The Company notes significant legislative, environmental, and financial drivers behind the developments of these activities, drivers which are expected to intensify and endure.

The agreement with SM provides significant growth potential for the Company in that it creates an alternative route to market for Tlou's gas in Botswana, while adding high value carbon and carbon products to the potential revenue streams.

Tony Gilby, Tlou's Managing Director, said
"Tlou is well advanced in terms of approvals and agreements to commercialize our gas.

With continued encouraging gas flows from Lesedi and the development of additional ways to monetize our gas, we are about to enter a very exciting time for our company.

With the potential for Synergen Met to grow alongside Tlou, we see the development of a mutually rewarding and highly beneficial relationship."

The demand for cleaner sources of power is growing worldwide and with Tlou's ability to develop power and hydrogen projects, the Company is very well positioned to take advantage of favourable market conditions.

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