Stock Insiders is a new podcast series powered by Stockhead focusing on investing hosted by renowned business journalist Oriel Morrison. The program is sponsored by Barclay Pearce Capital, Australia’s leading corporate advisory and equities trading firm. 

Founder and managing director of Infinite Blue Energy Pty Ltd, Stephen Gauld, is interviewed by business journalist Oriel Morrison in Stockhead's new podcast series, Stock Insiders.

Infinite Blue Energy Pty Limited

Infinite Blue Energy Pty Ltd is an Australian-based renewable energy company with a vision to become Australia’s 1st commercial green hydrogen producer.

Green hydrogen is a future renewable energy source with the CSIRO estimating the size of the green hydrogen economy in Australia to be $10B by 2040. The Company is facilitating Australia’s first, and one of the world’s largest, commercial-scale green hydrogen projects - Arrowsmith Plant based in WA.

The company appeared in a Stockhead article in June following the release of a CEFC study confirming the near-term commercial viability of green hydrogen. Following this, the podcast discusses the first-mover advantage in the booming green hydrogen market that IBE has.

Here is the transcript: 

Oriel Morrison:

"The interviews and discussions in this podcast are opinions only and not financial or investment advice. Listeners should obtain independent advice based on their own circumstances before making any financial decisions. This episode of the stock insiders podcast with me, Oriel Morrison is sponsored by Barclay Pearce Capital, a leading Australian corporate advisory and equities trading firm. Focused on your vision, Barclay Pearce specialises in making it a successful reality.

Hello everyone. And welcome to the Stock Insiders podcast with me Oriel Morrison. Today, we are lucky enough to have with us, Stephen Gauld, the CEO and co-founder of Infinite Blue Energy. Stephen, welcome."

Stephen Gauld:

"Pleasure to be here." 

Oriel Morrison:

"So good to have you with us today. And now, Stephen, before we delve into the hydrogen market and all that you're doing with Infinite Blue, tell us a little bit about yourself. You're a mechanical EMR engineer. You've been in the energy business for quite some time. Tell us a bit about that."

Stephen Gauld:

"Yeah, I engineered for one of the world's second-largest oil and gas companies, and spent almost 20 years of travelling the world, working for big oil and gas companies, and gained a  wealth of experience in the oil and gas sector.

Eventually moving into management and leadership rules. I also did a two-year stint in corporate finance, which also assisted me in making the decision to start my own company, which we've done very successfully with Infinite Blue Energy and our co-founder, Yolanda. So a great journey over the last 20 years, and I’m proud to be heading our own company and implementing everything that we've learned over the last 20 years working with BPM majors."

Oriel Morrison:

"You know Stephen, 

"You’re in an exploding business, no pun intended, of course. But what is the hardest thing about being in a business that at the moment is getting so much attention?"

    - Oriel Morrison, Business Journalist

Stephen Gauld:

"Yeah, it's been quite tough in the making. We've been working on Infinite Blue Energy for almost three and a half years now. And, it's coming up with the design of a green energy plant and how that's going to work in the markets.

And also, ensuring not just the hydrogen productions available, it's making sure the downstream side is in place as well. So, it's pointing to something, a hydrogen plant, if you don't have the infrastructure from fuel stations and the vehicles. So one of the things that we've done at Infinite Blue Energy, we spent almost a year working on the off takes.

So, the off-take tying into heavy vehicles, buses, trucks, passenger vehicles, and working with the existing Roadhouse companies on fuel stations and re-purposing the fuel stations as well. So in WA, we've physically repurposed 11 fuel stations and they're all finished with the first five being targeted to convert for hydrogen. So, it's a lot of work, a big journey that takes a lot of time and patience. 

"People always ask me- 

Why have you never given up?

We haven't because we felt it was the right thing to do. It was the transition fuel of the future." 

    - Stephen Gauld, Founder & Managing Director

It was interesting when I lived in Italy as an engineer, we actually talked about hydrogen many, many years ago, and here it is today, it's the fuel of the future.

So it's how things have passed and changed, and we're on that new disruptive technology from the traditional petrol and diesel we use in our cars and buses and trucks today to transition these vehicles, to have whether it's battery-electric or hydrogen fuel cells. So it's been an amazing journey in the last 20 years."

Oriel Morrison:

"Is it hard to get people to understand what you're doing, Stephen? Because there are a lot of eyeballs on the hydrogen market at the moment, it's still, certainly not mainstream. There's a long way to go before it is mainstream. So is it difficult to get people to really understand what you're doing?"

Stephen Gauld:

"I would say the people that we talk to, whether it's, business colleagues or, people that you meet in seminars. They're very keen, very interested. Everyone knows about renewable energy and the move forward. I think COVID-19 has made that more visible, people that we talk to, everyone agrees, it's the right thing to do.

And I think most people know today what hydrogen is about and the electric vehicles and hydrogen fuel cell vehicles. The people want to see the changes and they know it’s coming. People want to be part of it. And some of the people we've talked to, they ask us, well, how can we invest in your company? Because it's exciting times. 

And so, I truly believe, worldwide, the general public are fully aware of what needs to happen, and they're all ready to contribute to it." 

Oriel Morrison:

"So who do we see since the global hydrogen market exploding in the next sort of 20, 30 years now, they're saying the demand should exceed 500 million tons in the next 30 years. Is that a forecast that you agree with? "

Stephen Gauld:

"Definitely, but I actually think it's going to happen a lot quicker. If you look at some of the big companies like BP, Shells, Chevron, Total, they're all planning, a renewable energy economy. They will continue to invest in existing infrastructure but limit their expenditure to renew.

Most of these oil and gas companies are also spending their marketing money on renewable energy and some of the big gas companies are also shortening the life of their pipelines. An example, Andrew Fortescue, also had a strategy by 2004 to be carbon neutral. They've also brought that forward by 10 years to 2030. So a lot of the other big companies that we see here in person that we're talking to as well. They’re all talking about."

"2030 is the window where a lot of them will be carbon neutral and then eventually move to carbon negative over the next 5- 10 years. So I definitely think it's going to happen a lot quicker than what people actually think."

    - Stephen Gauld, Founder & Managing Director

Oriel Morrison:

"When it comes to green hydrogen, you know you're talking a lot about renewables, of course, which is what the hydrogen fits into. But then let's talk about green hydrogen, because again, going back to the forecast, Goldman Sachs says green hydrogen supplying up to 25% of the world's energy needs by 2050. Now, you see yourselves at the forefront of that green hydrogen revolution, if you want to call it that.

But at the moment, only quite a small portion of what is produced overall globally, actually fits under that banner."

Stephen Gauld:

"Correct. Most of the hydrogen produced today comes from fossil fuels, *inaudible* thats forming and Pyrolysis. So it's definitely a change. There's like 150 million tons of hydrogen produced annually at this moment in time. But only very few percent is done in green hydrogen. Definitely it's going to change. An example in Europe, the energy minister over at Europe mentioned a couple weeks ago, green energy, *inaudible* and it must come with green certificates confirming its new *inaudible* as well. So, definitely the market's evolving.

It will take time to build these plants. An example, we're doing at Infinite Blue Energy is having our first pilot plant 25 tons a day coming online in 2023. We are planning the expansion to 120 tons a day by 2025-2026 January, and then to expand that to a world scale. So if you take the timeline to have a world-scale plant, it is going to take them from the Blue Energy to at least 2027- 2028.

And to have a world scale plant by July, 2025 to have the production of 125 tons a day. So when you think of the transition to cleaner energy, 2030 is not far away. It sounds a long way, nine years, however, it’s going to take you 5-6 years to build, a plant of that magnitude. So if you want to be ready for a 2030 large-scale hydrogen plants, you need to be planning and doing your engineering, sourcing your *inaudible*, starting your plant design, ordering your long leads and your construction time. So it's a big journey ahead for everyone."

Oriel Morrison:

"But then on the top, you've also got to get it overseas. I mean, you're talking about global expansion here.

"When it comes to transporting the hydrogen overseas, that's going to then involve the logistics of the transportation as well. I mean, when will that be ready? That Australia can become one of the world's biggest exporters of hydrogen?"

    - Oriel Morrison, Business Journalist

Stephen Gauld:

"Today, there's already Kawasaki. They've got the hydrogen vessel coming from Japan to Latrobe Valley for the world's first, liquid hydrogen to Japan. That was initially targeted for the 2020 Olympic games, however, due to COVID it was canceled. But, that plant in Hastings is already finished. It's waiting for the vessel to take its first liquid hydrogen to Japan. Also in Norway, they already have a vessel four times the size of the current Kawasaki one, already in place. And they're actually doubling that size again. So the vessels already exist today. There are also plans for the vessels to be expanded to the same scale as LNG tankers at 150,000 cubic meters. So that journey has already commenced over the last 2-3 years, and the vessels are already making their first shipments of liquid hydrogen.

So it just needs to be scaled up. But the markets and the technology is already there to do it, and leveraging existing vessels. So, you could probably repurpose some of the existing LNG carriers with new storage vessels inside the tank. So the ones that you're currently using for LNG is probably just to take them out and put them in a new liquid hydrogen tank into them.

And that will allow you to use the same whole of the vessel and by re-purposing it. So I do believe that you can repurpose the vessels long term. This moment in time, the market are currently building new vessels at this moment. So it's not that the technology is not there yet. The technology is there now. It just needs to be scaled up now,  and that's what the big Kawasaki heavy industries are doing in Japan. And, same. And the same in South Korea from the vessel manufacturing in Korea and the same for the Scandinavia. So definitely the technology is available now."

Oriel Morrison:

"So, by the time that your plant is ready to export on a global scale, you believe that the logistics will be there to enable you to export hydrogen commercially in a commercially viable way?"

Stephen Gauld:

"Definitely because as part of building Arrowsmith to a world scale plant, we've got to have the off take in place. We've also got to have the vessel and the facility. So, working on the domestic market, you basically need the hydrogen plant and you need the infrastructure, so two key components.

However, when you expand and you're looking to ship, you've got to add in the third component. So a water steel plant has to tie into the off-take, to the plant and to the vessel. So, without one of the components, your project's not going to succeed. The vendors that we're talking to and the buyers hydrogen for world scale plants from Australia, they're looking for a complete supply chain solution offered by a tech company. So that's a key thing that Infinite Blue Energy have been working on for almost two years already on our stage two design, and how we are going to be shipping to Asia Pacific. So that's very well understood inside our organisation."

Oriel Morrison:

"Now you've recently raised 10 million as part of your pre IPO capital raising, doing really well. Oversubscribed, closed, I believe, and in only 2 hours."

Stephen Gauld:

"Yes.

We worked with Barclay Pearce in Sydney. They got the strategy correct, they did very good. Their marketing, pre IPO, the material that they utilised on that project was first-class. The message was delivered successfully. And, we closed a very successful IPO which surprised everyone!

    - Stephen Gauld, Founder & Managing Director

Since then we closed the IPO several weeks ahead of the actual initial deadline due to the interest in our company. We've actually got over 300 investors currently waiting to join Infinite Blue Energy, so at the next IPO raise that we're doing, a pre listing we don't foresee there being any issue in delivering the next capital raise to build Arrowsmith as part of our equity share.

So, I can only compliment the people that were involved in the last couple of years. It was a great job by everyone."

Oriel Morrison:

"What sort of timeframe do you have around the IPO now Stephen? "

Stephen Gauld:

"Well, we're actually  targeting the last quarter of 2021, it was clenched and we *inaudible*  the IPO just over two weeks ago.

We've had some great visibility with Barclay Pearce in the last capital raise. And, not just the last Capital raise, they focus on Infinite Blue Energy as a company. Three weeks ago, we were actually mentioned in some of the world magazines and the key IPO’s to watch over in 2021. Infinite Blue Energy was the number three company to watch in the world, for their listing.

So for Infinite Blue Energy to be the third, most important company in the world in 2021 to watch out for, that's a great achievement. And also just to work two weeks ago, we were also  from the world times and leaders, Infinite Blue Energy and Arrowsmith was selected as the company or project to watch worldwide in the month of June.

So, this is all great news for Infinite Blue Energy as we plan our journey to listing the company in the next, five, six months."

Oriel Morrison:

"So what are your plans for using the proceeds of the actual listing then Stephen specifically. I mean, obviously we just talked about the capital raise that you've just completed, listing the lovely * inaudible* even more than that, depending of course, on your valuation, which I would expect from everything that you've said will be quite high. What are you planning on doing with the funds? "

Stephen Gauld:

"Yeah, we're looking to invest in Arrowsmith stage one, which is the 25 ton a day project. We're looking to invest our equity share for all our shareholders, and with our strategic partner that we're currently working on at this moment in time in closing. We'd be looking to build that project and get the first large scale green hydrogen plant up and running in Australia, and present that to the other markets globally over this is what can be achieved. And the time that this can be achieved, and use all the funds to purchase the long lead items such as the wind turbines, the electrolyzers liquefaction pack technology, the solar power and the integration smart systems. So, basically, and some working capital. So that will be the use of the funds. 95- 97% will all be used for purchasing equipment. Another 2-3% will be, basically for running the organisation and the construction with the staff to manage and build it."

Oriel Morrison:

"With all of this attention that you are receiving and congratulations by the way, on some of those, notable achievements and comments. And, you've obviously got a lot of eyes on you. So, are you fielding takeover offers at the moment Stephen? "

Stephen Gauld:

"No, not, at this moment in time. Again, the project we're doing, the people in our office as we build our *inaudible* progress to a financial closure, having our strategic partners on board and listing, it’s exciting to be hiring people. So hiring people to build the first project, a large *inaudible* in Australia. It's exciting, the people that we employ at this point in time, enjoy coming to the office, and to be part of this transition and disruptive technology. Yeah, so I would say, I mean,  we are in a great position, there would probably be interest to take us over or whatever, but at this moment in time we're progressing our projects and working *inaudible* ourselves at the moment."

Oriel Morrison:

"Okay. All right, Stephen well we'll certainly be watching progress very, very closely, and we really do appreciate your time today. Thank you so much for joining us. And thanks of course, to all our supporters, all of our listeners, you are listening to stock insiders with me. Oriel Morrison. We'll see you next time.

"This episode of the Stock Insiders podcast with me, Oriel Morrison was sponsored by Barclay Pearce Capital, Australia's leading corporate advisory and equities trading firm. Barclay Pearce Capital provides specialised corporate advisory and equities trading services to privately owned businesses, small to medium sized public, and ASX listed companies."

    - Oriel Morrison, Business Journalist

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