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Elixir sees potential in green hydrogen in Mongolia

Local gas explorer Elixir Energy’s Gobi H2 says its green hydrogen project in Mongolia could help China’s green steel production.

Jun 19, 2023, updated Jun 19, 2023
Image: Usukhbayar Gankhuyag, Unsplash

Image: Usukhbayar Gankhuyag, Unsplash

South Australian Elixir Energy is positioning itself to deliver green hydrogen to major steel producer’s in China’s north.

Gobi H2 is Mongolia’s first green hydrogen project and is being developed by the ASX-listed gas explorer, which sat at 47 on InDaily’s South Australian Business Index of the state’s top 100 companies last year.

Gobi H2 is located just across the border from one of China’s largest steelmaking hubs centred around Baotou in that country’s autonomous region of Inner Mongolia. The hub produces more steel each year than Australia.

In a presentation to the Asia Clean Energy Forum 2023 in Manila this week, Elixir Energy managing director Neil Young outlined the company’s ambitions for its Gobi H2 project.

The company has longstanding experience in Mongolia’s energy sector as a gas explorer and was behind Mongolia’s first natural gas discovery in 2020.

The Gobi H2 green hydrogen project is focused in the short term on its pilot plant project, with projections for the ~10MW electrolyser producing around 25,000 tonnes of H2 each year.

China is already working on its green hydrogen infrastructure and is developing a hydrogen pipeline transmission network in the region.

This includes the announcement earlier this year of a 400-kilometre pipeline from Ulanqab in Inner Mongolia to Beijing to be constructed by state-owned Sinopec.

Extending this network to the north will enable China to import green hydrogen to decarbonise its steel industry and progress toward meeting its net zero by 2060 goals.

Elixir managing director Neil Young said the company’s analysis of the Gobi H2 pilot meets the green definitions of the main global jurisdictions, including China.

He said this is critical for procuring both customer and project finance support.

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In mid-2022, Elixir announced the signing of a MOU with Japan’s SB Energy Corp (now Terras Energy), which operates a windfarm in the Gobi.

Elixir procured a pre-feasibility study from global consulting firm AECOM earlier this year to give the parties confidence to advance the project and they are now aiming to enter into a joint venture later this year.

The pilot plant will run on solar and wind energy.

Young said the cost of renewables accounts for around two-thirds of the cost of green hydrogen production, so the proximity to manufacturers in China, as well as Terras Energy’s buying power look favourable for the project’s success.

He pointed to the significant cost advantage of transporting green hydrogen gas to market by pipeline, giving the company a competitive advantage over seaborne supplies of liquid hydrogen or ammonia gas.

Moving energy from Mongolia to Chinese markets by pipeline is also more energy efficient than by electricity transmission.

Elixir Energy made InDaily’s South Australian Business Index again last year, sitting at 47 in the independent ranking of SA’s top 100 companies by partner Taylor Collison.

Early bird tickets are now on sale for the South Australian Business Index lunch.

Use the code SABIEB23 to purchase a single ticket for $178.62 (saving $19.70) or a table of 10 at $168.18 per person (saving $18.55pp).

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