Fortescue Metals Group Ltd advises that Fortescue Future Industries (FFI) and Tree Energy Solutions (TES) have formed a global strategic partnership.
In a statement, Fortescue said the collaboration aims to accelerate the construction of cutting-edge green hydrogen and green energy import facility in Germany.
The €130 million (US$127 million) investment will be financed by FFI’s unused capital commitment and gives FFI a chance to access vital infrastructure for carrying out its agenda.
Netherlands Fortescue Future Industries Holdings B.V., an FFI affiliate, will contribute €30 million (US$29 million) to Tree Energy Solutions B.V. to become a stakeholder. In addition, TES will contribute €100 million (US$98 million) to the development of the TES terminal in Wilhelmshaven, Germany, and will retain a 30 per cent ownership in Deutsche Grüngas und Energieversorgung GmbH, a TES subsidiary that will be building the TES Green Energy Hub in Wilhelmshaven.
Green energy can be transported thanks to the portfolio of terminals that TES is building worldwide. This partnership’s initial phase will involve developing and investing together in the supply of 300,000 tonnes of green hydrogen. The final locations will be decided upon soon, and a financial investment decision is anticipated for 2023.
In 2026, TES anticipates receiving its first shipment of green hydrogen at its terminal in Wilhelmshaven, Germany. Australia, Europe, the Middle East, and Africa will be the primary areas of concentration for the first partnership projects.
By speeding the import and manufacture of green molecules as a more affordable alternative to fossil fuels, the new strategic partnership underscores FFI and TES’ commitment to lowering global emissions. E.ON, HSBC, UniCredit, and Zodiac Maritime are a few multinational energy firms and international financial institutions that have invested in TES with FFI.
According to Fortescue, the partnership will bring together TES’s distinctive, sustainable business model and access to the European green hydrogen market with FFI’s industry-leading expertise in creating large-scale renewable energy generation.
Fortescue’s capital allocation system dictates that the project will be supported by the US$1.1 billion in an unutilised capital commitment that FFI will have at the end of June 2022. The estimated capital expenditure for FFI in FY23 has been changed from US$100 million to US$230 million to account for this investment. The range of $500 to $600 million for FFI’s expected operational expenses is unchanged.
Fortescue Executive Chairman Dr Andrew Forrest AO said with this investment, Europe will be able to replace fossil fuels, which are vitally needed in the UK and Europe. Not in 2050, but rather in four years.
“From the beginning of FFI, our philosophy was to drive performance across the entire new renewable GH2 value chain while delivering returns to our shareholders. This investment reinforces this commitment and is a significant step forward in FFI’s journey to become one of the world’s largest green energy producers,” Dr Forrest stated.
According to FFI CEO Mark Hutchinson, following our announcement in March 2022 to provide Germany with five million tonnes of green hydrogen, with supply beginning in the middle of the decade, the investment supports the delivery of Fortescue’s supply deal with E.ON, Germany’s largest energy distributor.
“We are delighted to announce this partnership which marks a new milestone in delivering scalable, affordable green hydrogen as well as securing renewable energy production. This agreement is another stepping stone in building TES as one of the leading hydrogen players in the world to accelerate the energy transition with the most cost-effective, bankable and scalable green alternative to today’s fossil fuels,” TES CEO Marco Alvera said.
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