November 29, 2021 • Paul Rodden • Season: 2021 • Episode: 68
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Welcome to The Hydrogen Podcast! In episode 068, A massive merger in the hydrogen market could make big waves in the future. Microsoft's moving forward on their hydrogen news, and SNAM is furthering their investments in gas pipelines to advance hydrogen. All of this on today's hydrogen podcast. Thank you for listening and I hope you enjoy the podcast. Please feel free to email me at firstname.lastname@example.org with any questions. Also, if you wouldn't mind subscribing to my podcast using your preferred platform... I would greatly appreciate it. Respectfully, Paul Rodden
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A massive merger in the hydrogen market could make big waves in the future. Microsoft's moving forward on their hydrogen news, and SNAM is furthering their investments in gas pipelines to advance hydrogen. All of this on today's hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions will unlock the potential of hydrogen and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
On a press release on November 24 Benessere Capital a capital acquisition company, a special purpose acquisition company and eCombustible Energy LLC, a leading innovator and provider of customizable hydrogen based fuel for the thermal industry applications announced that the companies have entered into a definitive business combination agreement providing for a business combination that will result in Ecombustible Energy becoming a public listed company subject to regulatory and stockholder approval and other customary closing conditions.
Upon completion of the proposed transaction, the combined company is expected to operate under the name ecombustible Energy Corp, and list on NASDAQ capital market under the ticker symbol ECEC, founded in 2010. By Miami based entrepreneur and investor Jorge Arevalo. Ecombustible Energy offers a long term fuel supply solution that is designed to provide the world's most hydrocarbon dependent industries with a fuel that is carbon free cost competitive and requires little to no modification to existing customer equipment. The efficacy of its hydrogen based fuel ecombustible has been validated through testing and independent assessments by third party engineering firms and experts.
According to Arevalo we believe a carbon free future will be best achieved in a win win basis, with hydrocarbon reliant industries being empowered to transition to clean and renewable energy solutions without crippling investments. This business combination is intended to fuel the acceleration and adoption of Ecombustible, we are confident that we can help many of the world's largest industrial companies transition to our carbon free fuel and advanced ESG objectives in a seamless, viable and impactful way. Benessere is a blank check company formed for the purpose of effecting a merger capital stock exchange, asset acquisition stock purchase, reorganization or similar business combination with technology focused middle market and emerging growth companies in North Central and South America. Led by CEO Patrick Orlando Benessere was drawn to he combustible energy given the immense need for and potential of decarbonizing industries. He said the transition away from carbon containing fuel towards hydrogen and other clean fuel technologies has been underway for several years. However, the applicability of hydrogen as an alternative is nascent.
ecombustible has not only focused on producing hydrogen efficiently, but also making hydrogen a true solution for applications including fixed thermal applications. Thermal energy is foundational to a multitude of industrial applications, and we believe ecombustible presents a unique solution to the potential to accelerate the transition to a lower carbon future. He continues saying we are excited to work with ecombustible energy team in an attempt to enhance value across the company, industry, public shareholders and society. And as for the transaction benessere raised $115 million and its initial public offering earlier this year, and approximately 116.5 million is now held in a trust account for the benefit of Benessere's public stockholders. Under the terms of the proposed transaction. A newly formed successor to Benessere will issue shares of its common stock with an aggregate value of $805 million subject to adjustment to current security holders of ecombustible energy upon closing of the proposed transaction.
These ecombustible energy security holders may also receive subject to terms of business combination agreements up to an additional 59 million shares of Benessere common stock based on the daily volume weighted average share price of the combined company's common stock in any 20 trading days within a 30 day trading period beginning on the closing of the transaction, and ending on the 30th month anniversary of the closing. As always, the transaction is still subject to approval by stakeholders of Benessere and Ecombustible energy and other customary closing conditions including applicable regulatory approvals. So congratulations to Ecombustible and if this deal does go through a common stock value of $805 million. It's pretty great. More importantly, I think this highlights the future of hydrogen and where the market is going.
This also highlights what we've talked about in the past with the lowest hanging fruit for the hydrogen market to target heavy industry. And what's important to note is that ecombustible is not a lone wolf in this space. There are several other companies doing similar things that I think we may see further investments in to also target heavy industry. Next, some more news on the Microsoft data center demo project using hydrogen fuel cells. Now I've talked about this a little in the past, but a new article from power engineering dives in a little bit deeper. The article states that the project will test the reliability of a power system incorporating large format hydrogen fuel cells to produce reliable and sustainable backup power. Caterpillar will provide a system integration, power electronics and controls while Ballard is supplying an advanced hydrogen fuel cell module. This is on the heels of the US Department of Energy partially funding the project to the H2atscale initiative, the National Renewable Energy Laboratory or NREL will perform analysis of safety, techno economics and greenhouse gas impacts.
According to Christian Belady, Distinguished Engineer and VP of advanced development and cloud operations and Innovation at Microsoft, we continue to invest in research and advanced development in hydrogen fuel cells as one of the various pathways towards our commitment to be carbon negative by 2030. This latest project with Caterpillar will provide valuable insights into how to leverage hydrogen fuel cells for backup power in our data centers at scale. The project aims to demonstrate that the hydrogen fuel cell system can provide one and a half megawatts of backup power to meet or exceed expectations set by current and diesel engine systems. Along with that the system will be fueled by low carbon intensity hydrogen. Okay, so a few more insights that we can glean from this article. So initially, all we knew is that Microsoft was going to be transitioning or wanting to transition their diesel generators from diesel to hydrogen. Now we know that that's going to be in the form of hydrogen fuel cells. More importantly, Ballard fuel cells. Now with this setup, it says that they're looking to get one and a half megawatts of backup power. I don't think that will be a problem, who will be interesting to see is how they acquire their hydrogen, where it's developed and whether or not it's going to be stored on site.
Now, only time will tell but I will definitely keep my ear to the ground to see the results of this project. And lastly, in an article from reuters.com, Steven Jukes, writes, SNAM buys a stake in Algerian gas pipelines to pave the way for Hydrogen Highway, Italy's SNAM has agreed to buy a stake in pipelines carrying Algerian gas into Italy. In a move that could pave the way for hydrogen imports from Africa into Europe. Europe's biggest gas infrastructure group said on Saturday, it would pay energy company Eni 385 million euros or $436 million for 49.9% stake in the pipelines to jointly control the assets with its fellow Italian company. SNAM, which makes most of its money for managing Italy's natural gas transport grid has pledged to spend more on new clean business lines, such as green hydrogen, like other European gas grid operators its upgrading its national network to be hydrogen ready. According to SNAM CEO Marco Alvera.
In the future, North Africa could also become a hub for producing solar energy, and green hydrogen SNAM, which runs most of Italy's gas storage facilities also owns 20% of the tap pipeline that carries Azuri gas into Italy. The deal reflects the accelerating pace of planning taking place in the global oil and gas industry, keen to adapt as governments and activists ramp up the pressure to slash greenhouse gases. ENI is working on spinning off a series of oil and gas operations in a new joint ventures to help reduce debt and fund its new shift to low carbon energy. According to Eni chief executive Claudio Descalzi. This transaction allows us to free up new resources to be used on our energy transition path. Now Eni one of the biggest foreign oil and gas producers in Africa has a series of strategic agreements with Algerian state owned Energy Group, Sonatrach, Italy imports more than 90% of its overall gas needs.
And Algerian gas currently accounts for around 30% of flows. The pipeline companies involved in the deal posted net income around 90 million euros in 2020. And for this transaction, SNAM was advised by Unicredit, while ENI was advised by Rothschild. Okay, so I recently had a podcast talking about the European backbone plan, and some of the large moves going on there. This is one very specific part of that that actually highlights the efforts being made to develop that backbone. Now, SNAM and ENI aren't just big for an Italian company or companies.
They're both huge globally. And I'm going to be curious to see what these two companies do with this pipeline and the product that they're moving through it. They plan on continuing to move gas through it and create hydrogen in Italy, or do they plan on using green hydrogen created in Africa and pipeline that directly into Italy? Either way, this is a big move and making the European hydrogen backbone plan a reality.
Alright, that's it for me everyone. If you have any questions, comments or concerns about today's episode, come and visit me on my website at thehydrogenpodcast.com or you can always email me at email@example.com I would really love to hear from you, and as always, take care. Stay safe. I'll talk to you later.
Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more, I'd appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.