The HOA envisages the construction and commissioning of a hydrogen and solid carbon prototype to be installed at the Lesedi Project in Botswana. Synergen Met utilises unique intellectual property in the form of plasma technology to convert methane to hydrogen and potentially valuable solid carbon via a carbon neutral process. They have already built a first‐generation working prototype developed in conjunction with the University of Queensland that has produced hydrogen and NaCN (Sodium Cyanide) for commercial applications. Tlou says design work has commenced to modify this unit to produce hydrogen and solid carbon using Tlou’s existing gas flows and approvals. The prototype will be constructed and tested in Queensland prior to transport to Tlou’s Lesedi Project in Q1 2022. The post‐prototype objective is to grow this segment of Tlou’s clean energy business via a Joint Venture with Synergen Met throughout the Southern African Development Community (SADC) region and potentially beyond, subject to mutual agreement. The HOA also contemplates Tlou’s potential participation in Synergen Met’s proposed initial public offering (IPO), currently scheduled for later this year.
Potential benefits for Tlou include;
- A new market for the Company’s gas in conjunction with an experienced hydrogen development partner;
- Utilises Tlou’s existing gas flow which is currently being flared;
- The ability to diversify Tlou’s saleable products and customer base;
- Huge expansion potential beyond a successful prototype.
Potential benefits for Synergen Met include;
- A working prototype approximately coincident with Synergen Met’s IPO;
- Working with an experienced development partner with gas available, approvals and an in‐ country operating team;
- Potential to leverage from Tlou’s existing Lesedi Project;
- Huge expansion potential in Africa beyond a successful prototype.
Third party costs to build the prototype will be shared on a 50:50 basis whereas associated in‐house costs will be covered by each party. Tlou will supply the input gas and electricity at no cost to Synergen Met for the prototype. An input gas price will be negotiated on expansion of the project. Tlou will retain ownership of the input gas and Synergen Met will retain ownership of the plasma technology and associated IP. Hydrogen and Carbon products will be owned 50:50.
Tony Gilby, Tlou’s Managing Director, said “The HOA with Synergen Met is a truly exciting development for both companies. It potentially creates another major market for our gas that will complement, and be in addition to, the Lesedi gas to power project. While the gas to power project is steadily progressing, the hydrogen‐carbon prototype can be done using Tlou’s gas flow from Lesedi 4P and existing approvals for gas and solar. We look forward to working closely with Synergen Met in a symbiotic relationship to achieve significant upside for both of our shareholder groups.”