The Hazer Group Ltd (ASX: HZR) share price closed higher on Tuesday.
This comes after the hydrogen producer announced a construction milestone at its Commercial Demonstration Project (CDP).
Hazer's CDP is located at the Woodman Point Water Recovery Facility in Western Australia. The company aims to convert natural gas and similar methane feedstocks into hydrogen and high-quality graphite, using iron ore as a process catalyst.
Hazer shares reached an intraday high of 63 cents apiece today before closing 11.11% higher at 61 cents a share.
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What's drovie the Hazer share price higher?
Investors bid the Hazer share price up following the company's latest positive announcement.
In a statement to the ASX, Hazer advised it has completed construction and the associated commissioning activities at its CDP.
The newly-built facility is the first fully-integrated demonstration of the company's Hazer Process. It will process biogas produced from the treatment of wastewater at the Woodman Point Water Recovery Facility to produce hydrogen and graphite.
Management noted that the CDP is a stepping stone in demonstrating the scale-up and commercial potential of the Hazer technology.
The latter is a leading example of methane pyrolysis, a low emission and cost-effective method to produce clean hydrogen.
The first phase of the testing program will be carried out at low temperatures using a temporary carbon steel reactor. This will allow trialling of the gas conditioning, solids handling, process control, safety, and utilities systems.
In addition, collection of the initial process data is expected to ultimately de-risk the full operation of the CDP.
However, the company is facing COVID-19-related disruptions to global supply chains in sourcing necessary equipment. As such, the hot-wall Hazer reactor is progressing at its manufacturing mill in China. This is expected to be delivered to Australia some time in the third quarter of 2022, with installation the following quarter.
Management commentary
Hazer Group CEO Geoff Ward touched on the significant achievement, saying:
We are delighted to have reached this important milestone.
I look forward to completing the testing program and continuing to demonstrate the capacity of the Hazer technology to play a significant role at large scale in achieving our critical global decarbonisation goals.
Despite today's gains, the Hazer share price has fallen 28% over the past 12 months and is down 47% year to date.
