This Japanese giant is bringing Elixir Energy’s green hydrogen project one step closer

Mon 20 Feb 23, 10:42am (AEST)
High altitude wind turbines at work atop a snowy terrain
Source: Unsplash

Key Points

  • Softbank Energy Corporation and Elixir Energy executed a term sheet underpinning the latter’s Gobi H2 green hydrogen project on Monday
  • The term sheet is the first step in a binding 50/50 JV
  • Gobi H2 pilot project tipped for Front End Engineering Design (FEED) by as early as mid 2023

Elixir Energy (ASX:EXR) recently won accolades for being the first smallcap company to flow gas in the Mongolian Gobi Desert. 

Now, it’s racing on to its next big thing at Nomgon IX: the Gobi H2 Green Hydrogen Project

Elixir Energy confirmed its execution of a term sheet with Japanese multinational Softbank Energy Corporation on Monday, the first step towards a 50/50 JV partnership between both players to bring Gobi H2 to life. 

In June last year, both parties minted a Memorandum of Understanding (MOU). The term sheet signed on Monday reflects something of a midpoint in the negotiation and pre-development process. 

“We are delighted with…our maturing partnership with a company of the quality of SB Energy,” Elixir chief Neil Young said. 

“All the work we have done since the signing of last year’s MOU has supported our original thesis that the South Gobi region of Mongolia is a tier one location globally for green hydrogen production – and we are building significant first mover advantages here.”

Softbank makes sense 

Softbank is a logical partner to choose. The Japanese energy giant is largely pivoting into the clean energy space, with Softbank operating a number of renewables projects around the world. 

Softbank throws its support behind a number of green energy R&D projects around the world, including one project overseen by Bill Gates. 

Run me through Gobi H2 

Since August 2021, Elixir Energy has been running equipment at its Mongolian Gobi Desert coal bed methane acreage to monitor the intensity and predictability of overhead winds. 

The Nomgon IX project tenement is absolutely mammoth in size, equal to some small European nations.

Two things are needed at Gobi to make green hydrogen, which you can read a more thorough explainer on here

In short, Elixir needs water and electricity. 

The electricity will eventually come from wind turbines. Nearly two years of data collection supports the idea that wind in the area is strong and regular enough to feasibly generate industrial-scale levels of power. 

While water remains an ongoing issue to figure out, Elixir has also had success spudding a groundwater well that flowed 30L of groundwater every minute. 

That’s roughly half of what the company needs at this stage but, don’t forget, the context of being in the Mongolian desert makes this a more impressive find. 

The company expects to provide more updates on the project in the near future.

Elixir Energy's one year chart
Elixir Energy's one year chart


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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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