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Provaris Ltd (ASX:PV1), a decidedly unique ASX stock – it’s attempting to build a world-first hydrogen storage shipping tanker – has made a pivot that could perhaps command higher valuations than hydrogen ever will.
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Given it’s already making tanks to store liquefied (hydrogen) gas as part of its shipping vessel ambitions, Provaris is now looking at another kind of liquefied gas: carbon itself, climate change culprit number one.
Provaris has put the idea out there that it could exploit the Carbon Capture and Storage (CCS) market, given that it could just liquefy carbon dioxide instead.
The move is, perhaps, wise.
The company has been rocked by the vicissitudes of a post-COVID-19 world, and the changes to energy dynamics (and narratives) borne from it.
In the first year of lockdown, investors may remember fondly hydrogen was all the rage. The spirit of green hydrogen possessed Andrew Forrest’s body for a while; there was no shortage of talking heads claiming hydrogen gas will replace natural gas.
Forrest has since rolled his hydrogen spin-out back into his mainstay iron ore company. As part of that, 700 jobs had to go. But that’s besides the point when it comes to Provaris.
Hydrogen has effectively died in the water as an investment thematic, and that decline has hit Provaris hard. That’s evidenced nowhere better than the company’s share price over the last 5 years. When it was called Global Energy Ventures, back in 2021, the company was worth over 12cps. It’s now worth one cent.
(That’s what I mean when I call the stock “dormant.”)
While a pivot to (proposed) liquefied CO2 storage (and presumably sales), it hasn’t moved the company’s share price on Thursday. But it may be the kind of thing that could boost Provaris’s chance of acquiring further capital.
In its own words, Provaris noted the world is heading towards a reality of more fossil fuel production, not less – meaning investments in CCS technology are likely to continue.
Regular readers of mine will know I’m highly skeptical of carbon capture, because there’s no real evidence outside of advertorial materials that the technology can work at scale in 2025 – nobody has done it yet – but it remains the focal point of many universities, and, private (or public) companies looking to make it rich off a real climate change solution.
This, in my view, will always be a fantasy. Don’t forget Goldman Sachs is expecting the climate to hit +3C above pre-industrial averages, which prompted them to recommend investors go long on air conditioning stocks.
At any rate: It’s an interesting evolution for Provaris, and could be a good narrative for shareholders. Better yet, if the company can actually come up with a viable carbon capture solution, which I’ll concede isn’t impossible.
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But it could be a while off. Provaris only recently recommenced fabrication on the first of its prototypes, after its Norwegian builder tasked with manufacturing went bankrupt. Provaris was forced to buy it out.
(The company also had a somewhat fiery exchange with ASX compliance around a year ago, which you can read about here.)
PV1 last traded at 1cps.
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