Hexagon Energy Materials has agreed to an Indication for the Supply of Pipeline Gas (indication) from Chevron Australia Pty Ltd.’s WAH2 Clean Ammonia Project. The non-binding Indication has been prepared for the purpose of facilitating discussions between Chevron and Hexagon with the objective of agreeing and executing, subject to obtaining all required board or management approvals, a gas sales and purchase agreement by September 2025 to support Hexagon’s WAH2 Project Final Investment Decision targeted for the end of 2025.

The Indication contains confidential indicative commercial terms and contemplates:

• The supply of 33 TJ/d of gas from 2029 (60% of Hexagon’s requirements for Phase 1 of the WAH2 Project
• An initial supply period of 10 years and a potential extension for a further 5 years.

Separately to the Indication with Chevron, Hexagon expects to enter additional memoranda of understanding with other parties for gas supply and other aspects of the WAH2 Project including CO₂ sequestration, infrastructure and offtake over the coming weeks and months.

These will support the WAH2 Project’s entry into Front End Engineering and Design (FEED) which is planned to commence at the end of 2024.

Hexagon’s Chairman Charles Whitfield commented, “This is an important step forward in the development of the WAH2 Project. The Indication for gas supply is a demonstration of the growing confidence in the viability of the clean ammonia business in Australia and its ability to supply the critical energy and bunkering markets. The Indication, together with the increasing momentum of the Project, provides further support for the Company’s progress of several strategic initiatives to transform the Company into a clean ammonia producer.”

Chevron Australia General Manager Gas Marketing Australia Patrick Beashel said, “As one of Western Australia’s largest producers of domestic gas, we are pleased to have reached agreement with Hexagon for a non-binding Indication for the Supply of Gas to the WAH2 Clean Ammonia Project. The Project is an example of the potential of leveraging reliable natural gas supply to produce lower carbon sources of energy.”