The Strike Energy Ltd (ASX: STX) share price has opened higher this morning after the company's latest green announcement. It's about a green hydrogen and carbon sink project.
At the time of writing, shares in the energy company are trading for 29.5 cents each – up 1.72% on yesterday's close. The S&P/ASX 200 Index (ASX: XJO), meanwhile, is 0.44% lower.
Let's take a closer look at today's news.
Why the Strike share price is rising
In a statement to the ASX, Strike Energy says it will transition the energy supply at its proposed fertiliser manufacturing plant, Project Haber in Geraldton, Western Australia, from gas to a green hydrogen supply.
Beginning in 2025, approximately 2% of the plant's power will come from green hydrogen. By 2033, a "break-through point" where the cost of green hydrogen is projected to drop to under $2 per kilogram will see about a third of power come from the renewable source. The company claims the plant will be 100% green hydrogen-powered by 2044.
According to the statement, Strike has entered into separate, non-binding memorandums of understanding (MOU) with energy company ATCO and Infinite Blue Energy (IBE) for collaboration on mid-west infrastructure and green hydrogen offtake.
The company says these agreements will "facilitate alignment between the parties on the key infrastructure priorities for the mid-west region and to petition for their development with the WA government, who is a major supporter of the state's aspiring hydrogen economy".
Finally, in more news that could be lifting the Strike share price, the company says Project Haber has the potential to transition into a carbon sink. It forecasts 390 tonnes per day of methane could be replaced by green hydrogen.
Once the plant exceeds a 40% green hydrogen mix, it will be "required" to start importing carbon dioxide to continue manufacturing fertiliser. In the company's words, this action would turn Project Haber into a carbon sink for other industries.
Management commentary
Strike Energy CEO and Managing Director Stuart Nicholls said:
Progression of these MOUs with two of the key green hydrogen developers in the Mid-West is a great step in accelerating the WA hydrogen economy.
Incorporating green hydrogen in Project Haber's urea production process will enable Strike to produce some of the lowest carbon urea possible and potentially create one of Australia's largest carbon sinks, moving Strike into carbon negative territory.
Strike share price snapshot
Over the past 12 months, the Strike share price has increased by around 15%. That's about 10 percentage points lower than the ASX 200 over the same period. The company's share price is up around 3% since the beginning of the year.
Strike Energy has a market capitalisation of approximately $596 million.
