Andrew Forrest-backed hydrogen hopeful HyTerra starts US drilling

Billionaire Andrew Forrest is not giving up entirely on his hydrogen dreams, backing Perth-based HyTerra in a US-drilling program.

Andrew Forrest at his property, Minderoo, in the northwest of Western Australia. Picture: Rohan Kelly

Billionaire Andrew Forrest is not giving up entirely on his hydrogen dreams.

Forrest’s Fortescue last year acquired a strategic 39.8 per cent interest in Perth-based white hydrogen explorer HyTerra for $21.9m.

Drilling started at HyTerra’s Nemaha Project in Kansas at the weekend, the first step in a 12-month exploration work program designed to unlock the potential of natural hydrogen in the US.

It may be a case of follow the money, with the world’s richest bigwigs – Jeff Bezos and Bill Gates – all throwing plenty at the Koloma hydrogen project next door to HyTerra’s reserves.

HyTerra shares are up 70 per cent to 3.4 cents so far this year. The company is led by former Shell head honchos – Ben Mee and Avon McIntyre – who last year enticed Shell’s first ever and former chief scientist Drik Smit to join the company.

It hasn’t been all smooth sailing for Forrest, Australia’s biggest promoter of green hydrogen. Earlier this year, he axed an investment pact with US hydrogen giant Plug Power as developers pull back from projects following the election of US President Donald Trump.

White hydrogen promises a step change for the energy industry as a huge source of cheap, green power. Unlike green hydrogen, which requires manufacturing, white hydrogen is naturally formed through geochemical reactions within the earth and is trapped in reservoirs.

It can potentially be cost-competitive with fossil fuels. Besides being clean-burning compared to natural gas when used for heating or power generation, natural hydrogen can also displace fossil fuel-derived hydrogen that’s used for industrial processes, such as the manufacture of fertiliser, which will deliver immediate reductions in carbon emissions.

Although the Trump administration has threatened to remove a tax credit for hydrogen as a domestic fuel source, both renewable and oil and gas firms are pushing to keep it.

HyTerra was the first company to list on the ASX with a focus on white hydrogen, which potentially has much lower production costs and carbon emissions than man-made hydrogen.

Nemaha is between Kansas City and Wichita in the centre of a major industrial and manufacturing hub. HyTerra says the project can be connected via railways, roads, and pipelines to a long list of potential offtakers nearby, including ethanol and ammonia manufacturers, and petrochemical plants. The company’s exploration area covers about 34,000ha. It includes historic wells with more than 10 hydrogen and helium occurrences, some up to 92 per cent hydrogen and 3 per cent helium.

Originally published as Andrew Forrest-backed hydrogen hopeful HyTerra starts US drilling