Australian oil and gas exploration and development company Elixir Energy has signed a memorandum of understanding with the Mongolia Green Finance Corporate to support financing for the first phase of a proposed green hydrogen project planned for the South Gobi region of the East Asia nation.
Adelaide-headquartered Elixir Energy has announced it has achieved progress on multiple fronts for its proposed Gobi H2 green hydrogen project in Mongolia, including the signing of a memorandum of understanding (MoU) to support project finance.
ASX-listed Elixir, whose strategy rests on the view that the Gobi region is one the of best locations in the world for producing and exporting green hydrogen, given its renewable resources and immediate proximity to likely hydrogen markets, said it had executed a memorandum of understanding (MoU) with the Mongolia Green Finance Corporate (MGFC) as it seeks to progress its renewable energy ambitions.
Under the MoU, the two entities will work together to identify carbon offset opportunities to reduce exploration and appraisal stage scope 1 and 2 carbon emissions, develop larger scale forestry and nature related offsets, and work with international financial institutions over the project financing of Gobi H2.
Elixir managing director Neil Young said the company is pleased to be working with the Mongolian government to investigate the world-class green hydrogen potential of the country which is bordered by Russia to the north and China to the south.
Elixir, which operates in Mongolia and the United States, said it would also seek to work with the Mongolian government and other potential stakeholders to bring forward Australia’s expertise in the nascent hydrogen economy in technical, commercial and legal areas.
“All the work we are doing on our Gobi H2 project serves to reinforce our original starting concept: the country is a potential tier-one location for large-scale hydrogen exports,” Young said.
“Elixir’s first-mover advantages are being progressively locked in and it is fantastic to see the rapidly growing interest in this future-facing industry from multiple local and international stakeholders.”
The signing of the MoU follows Elixir’s recently commissioned independent report from energy analyst K1 Capital which evaluated the wind and solar resource potential of the South Gobi region for the production of green hydrogen.
The report estimates the project location has a combined wind and solar utilisation of 79%, compared to the 60% rate in the Southern Goldfields, and 45% in the Pilbara region in Western Australia. The report said this is underpinned by very high wind speeds, along with a cold climate which could support enhanced solar efficiencies.
Elixir said a location with a capacity factor of 79% will produce about 60% more hydrogen from the same capital investment than an area with a roughly 50% capacity factor.
Young said the company believes Mongolia is “exceptionally” well placed to supply what are predicted to be substantial hydrogen imports.
“The K1 Capital report supports our thesis that the South Gobi region of Mongolia has such potential – not only given its location immediately proximate to markets, but also its superb renewable resources,” he said.
“The wind and solar combination in our project area is as good as we have seen anywhere.”
While Elixir is yet to release details about the size of the proposed project, it late last year acquired the 50 MW Solar Ilch solar project being developed in the South Gobi desert by Mongolian investment firm Nova Terra and Thailand-based solar project developer Symbior Solar.
Elixir said it is now harvesting detailed data for both wind and solar in the region using SODAR (Sonic Detection and Ranging) equipment provided by Sydney-based technology company Fulcrum3D.
Elixir said it has also ordered a solar-focused monitoring unit from Fulcrum3D that will be deployed at the Solar Lich solar farm. It will be installed to provide data that will assist project funding capacity.
“The acquisition of Solar Ilch is a material step in the implementation of our relatively recently announced hydrogen strategy, but is only one of a good number of moves we are making on this front,” Young said.
Elixir said a concept stage study has also been commissioned from Australian engineering firm GPA Engineering for a pilot project to supply green hydrogen to Inner Mongolian steel mills in China.
The company said it has also initiated a commercial study with international energy consulting firm Rystad Energy into China’s long-term hydrogen demand and supply.
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