BPH Energy’s Clean Hydrogen moves to production as PEP-11 permit dispute continues

BPH Energy (ASX: BPH) has released its report for a dramatic March quarter that included a decision to move to production on a new clean energy technology and an ongoing dispute with the New South Wales government over an offshore petroleum permit.

In mid-February, BPH announced its investee company Clean Hydrogen had moved from proof of concept to production.

Clean Hydrogen owns a unique technology for creating “turquoise” hydrogen, a product that is attracting global attention as a fuel of the future.

“Turquoise” is the industry term used for hydrogen sourced from natural gas hydrocarbons using thermo-catalytic pyrolysis.

Since there are no CO2 emissions, the carbon becomes solid in the form of a fine black dust type material, a carbon composite made from carbon nanotubes (CNTs) and alumina (ceramics) – providing an additional market opportunity.

CNTs have unusual mechanical properties to reinforce their alumina composite, acting as a toughening agent.

They have a tensile strength greater than steel, conductivity greater than copper and thermal dissipation greater than diamonds. They also resist corrosion and fatigue.

Clean Hydrogen’s hydrogen process renders natural gas a clean source of two products—turquoise hydrogen and solid carbon composite.

The next steps for Clean Hydrogen are scaling its carbon composite and hydrogen production.

PEP-11 permit battle

BPH attracted national attention when it declared it was considering legal action after the NSW government brought in a bill to block offshore oil and gas exploration and development off its coast.

The move impacts BPH’s investee company Advent Energy and its 100% subsidiary Asset Energy, the operator of the PEP-11 joint venture (JV).

BPH says NSW and its government only have jurisdiction and the power to control exploration and extraction in coastal waters up to 3 nautical miles (4.83km) offshore from the NSW coast.

As PEP-11 is beyond that 3 nautical mile limit, it is under the jurisdiction of the Commonwealth of Australia, where gas exploration operations including safety and the environment are controlled by the federal government’s offshore watchdog NOPSEMA.

Gas plans proceeding

In the meantime, the JV intends to push on with its gas exploration plans by drilling around 26km offshore, well beyond the limit of NSW coastal waters.

Asset Energy is continuing to progress the JV’s applications for the variation and suspension of work program conditions and related extensions of PEP-11.

In February 2023, a decision by the previous Commonwealth-NSW joint authority to refuse the application was quashed by the Federal Court of Australia.

Asset has provided additional updated information to the Authority and the National Offshore Petroleum Titles Administrator (NOPTA) in relation to its applications.

Asset Energy’s applications’ status with NOPTA is now ‘under assessment’.

Application process

BPH said it understands that the next step in the application process is for the Authority to make its decision on Asset Energy’s applications.

While the applications for the variation and suspension of work program conditions and related extensions of PEP-11 are being considered by NOPTA, Asset is investigating the availability of a mobile offshore drilling unit to drill the proposed Seablue-1 well on the Baleen prospect, which would take approximately thirty-five days to complete.

It is in discussions with drilling contractors and other operators who have recently contracted rigs for work in the Australian offshore.