HydrogenOne (HGEN) has announced that further to its June 19 capital raise (which you can read about here), portfolio company Strohm, the world’s first and leading thermoplastic composite pipeline technology company, has been awarded a contract by TotalEnergies. This is the largest commercial award for pipe supply in Strohm’s 16-year history, marking Strohm’s entry into the ultra-deepwater market, and qualification of a CO2 compatible TCP solution.
QD comment: This announcement continues to prove the commercial value of Stohm, which makes up over 10% of the HGEN portfolio and provides another example of the potential upside that exists within the fund as its holdings develop. While HGEN has struggled in recent times as markets have shied away from higher growth sectors, the current discount provides an increasingly attractive entry point into a sector which has enormous potential.
Strohm’s pipelines have a 50% lower CO2 footprint than conventional pipelines and are being used as part of the oil & gas sector’s move to reduce the greenhouse gas footprint of traditional operations. In addition, Strohm’s pipelines are being deployed for the transportation of CO2 and hydrogen in offshore environments, as part of the energy transition away from fossil fuels. The pipeline provides a corrosion resistant solution for CO2, which can otherwise cause stress corrosion cracking on alternative pipelines. This is an industry first that establishes Strohm and its products as a market leader in the CO2 transportation market, with a disruptive, long-term and low carbon footprint solution. The new pipelines are due for installation in 2026 at a water depth of 2,200 meters, in an offshore high CO2 field located in the Santos Basin in the Brazilian pre-salt area.
At 31 March 2024, HydrogenOne’s investment in Strohm represented 12.4% of the company’s NAV.
Thomas Leize, Project Manager at TotalEnergies, commented: “It will be the first project like this in the pre-salt and we have carefully selected this innovative technology for replacing the flexible lines in operation with a clear focus on design life, performance and carbon footprint. This technology is important because it represents a solution to a long-lasting corrosion problem, at a competitive cost, applicable for ultra deep water, in line with our commitment of reducing emissions from our operations.”
Martin van Onna, Strohm CEO, added: “As the pioneer of TCP technology, we have experienced strong support from TotalEnergies since as early as 2009. Recently TotalEnergies installed a TCP Jumper at the Egina field, and now we welcome this TCP Flowline contract – the ‘definitive solution’ that the industry has been seeking. As a global first, a first in Brazil, and a first for resolving the CO2 corrosion issue, it is a breakthrough moment for the sector, one that further evidences our pioneering spirit. I would like to sincerely thank TotalEnergies for their trust in our technology, our company, and our team, and I look forward to seeing these flowlines being installed.”
HGEN : HydrogenOne announces new TotalEnergies contract for portfolio company Strohm
