• QEM commits to undertake studies into “green” hydrogen opportunities at Julia Creek
• Progression of strategy comes amid buoyant market conditions, supportive policy environment and optimal project location
• Hydrogen strategy to underpin the continued development of the Julia Creek vanadium and oil shale project
• QEM will commence discussions with the recently appointed Queensland Minister for Energy, Renewables and Hydrogen on the approval process
QEM Limited (ASX: QEM) (“QEM” or “Company”) is pleased to announce that it has commenced studies into green hydrogen opportunities on site at QEM’s flagship 100%-owned Julia Creek vanadium and oil shale project in North Queensland.
The studies will investigate the financial and regulatory requirements of the Company to produce hydrogen on site at Julia Creek using a “green” solar-powered electrolyser. It is envisaged that the hydrogen would initially be used as a support to the energy needs of other resources projects located in the North West Minerals Province of Queensland, but ultimately for the hydrogeneration of the Company’s raw oil into transport fuels.
To assist in its assessment of capital and operating costs, the Company has appointed E2C Advisory Pty Ltd (“E2C”). E2C previously assisted the Company with the review of a processing technology utilising a hydrocarbon solution for oil shale extraction (refer to ASX announcement dated 14 April 2020) and have extensive experience in electrolysers used for hydrogen production.
QEM will commence proactive discussions with the Queensland state government on progressing the approval process to access water resources for the potential development. The Company will focus on securing the relevant approvals following the successful completion of the financial studies to be conducted by E2C.
QEM Managing Director Gavin Loyden said the Company was delighted to be working with experts who possess substantial expertise in the hydrogen field.
“The commissioning of these studies will lay the groundwork to advance our green hydrogen strategy at Julia Creek, amid increasingly buoyant market conditions and the project’s optimal location and resource profile to produce hydrogen on-site,” Mr Loyden said.
“For example, the Queensland state government established a ministry for hydrogen in November 2020, as the state government seeks to encourage investment into the bourgeoning market.”
“Crucially, the hydrogen strategy aligns with the broader strategic direction of Julia Creek, as QEM looks to target both the liquid fuels and renewable energy sectors.”
“We remain committed to continuing the development of Julia Creek to unlock the substantial latent value the vanadium and oil shale project possesses.”
Julia Creek Project Development
The Julia Creek Project currently contains a globally significant JORC (2012) Vanadium Resource of 2,760Mt (220Mt Indicated and 2,540Mt Inferred) with an average V2O5 content of 0.30%, and a 3C Contingent Oil Resource of 783 MMbbls of Oil (refer to ASX announcement dated 14 October 2019)1.
Hydrogen is a critical element for the hydrogeneration of oil, and on 21 July 2020, QEM announced that test work utilising a hydrocarbon solution for oil shale extraction at Julia Creek resulted in oil yields up to 181 kg per tonne, which is 218% on those reported under Modified Fischer Assay (MFA).
Pursuing the green hydrogen strategy aligns with QEM’s broader strategic direction. The Company does not anticipate any material adverse impacts on the development of the Julia Creek project stemming from the advancement of the hydrogen strategy.
Macroeconomic Strategic Rationale
QEM’s advancement of its green hydrogen production strategy comes amid growing investment and interest in the renewable energy source from both the private and public sectors. This is highlighted by the Queensland state government appointing Australia’s first dedicated minister for hydrogen in November 2020, with the Queensland government stating that it expects hydrogen to play in a key role in both the local economy and as a major new export opportunity for the state.
The Julia Creek project is conveniently located in the North West Minerals Province in Queensland and also falls within the newly designated Eastern Resource Development Corridor, which is home to numerous other resource projects, providing QEM with significant opportunities to support the energy needs of these companies to develop their projects, as well as QEM’s own project. This is particularly relevant as the demand for renewable energy sources grows.
Julia Creek is also positioned in a transport nexus in North Queensland, as road trains and trucks travelling along the Flinders Highway to Townsville typically need to refuel in the Julia Creek area. This presents additional local opportunities to QEM in the longer term if the proliferation of hydrogen- powered vehicles emerges.
About Green Hydrogen
Hydrogen, which is the most abundant element on earth, is a non-toxic colourless gas that can be extracted from other compounds by a chemical process.
The creation of hydrogen is considered green if renewable energy, such as solar panels or solar concentrators, are used to generate electricity for electrolysis of water, which creates no carbon dioxide in the production process and may be used for transport, energy and other industrial purposes.