Northwest Natural Holding Company (NYSE:NWN) Q3 2023 Earnings Call Transcript

In addition to that blending at Sherwood though, we – as we’ve mentioned before, we’re pursuing a number of pilot to test out methane pyrolysis equipment so that turquoise hydrogen where you’re basically taking natural gas, producing hydrogen and then through methane process that creates a solid carbon output. And that’s basically sequesters the carbon. You can then use that output, got solid carbon in the secondary market like asphalt. And so, we’re really excited about that technology because we’re seeing a number of different companies coming into the market with solutions that range in sizes. The first pilot we’re actually installing the equipment next week is with Modern Hydrogen at our central facility. We’re really excited about getting that off the ground, but we’re also looking at a new technology from a Finnish company called Hycamite.

And the reason we’re excited about that is, it has the potential to blend or to blend and to produce that solid carbon at a much larger scale, so it could be a really nice solution for our large customers. So I guess, the bottom line is, our view is that we’re going to have hydrogen blending directly into the system, but we’re also really excited about this methane pyrolysis because you don’t have to change any of equipment and it has the potential to have a pretty low cost point. So a number of pilots under way, we’re also continuing with the CARBiN-X pilot that we’ve talked to you about. Similar, but the byproduct is kind of a pearly substance that you can put in. So again, that has the potential to be a smaller end-use equipment solution.

So I think that there is no doubt hydrogen is going to be part of the solution set. I mean, we’re already looking at hydrogen opportunities for procurement for our existing customers. And to the extent that hydrogen can be in a measurate price point with RNG procurement, we’re going to be looking at that. So I would say, you know, over the next five years to seven years, we expect hydrogen to be more of a solution for our system. But we have to start now, and that’s what we’re excited about.

David Anderson: We’re going to move as quickly as we can, Selman, to be just very frank. And I would be disappointed if it took that long, personally.

Selman Akyol: Understood. And then also you talked about where you’re – I thought you were doing some pilot tests on small industrial scale with EDL. Anything coming out of that?

Kimberly Heiting: Just the technologies that I mentioned, we have…

Selman Akyol: Okay.

Kimberly Heiting: Two or three of our industrial folks that were under NDA to test some different kinds of hydrogen application. We did pull up a new team, decarbonization services team that really are going to be specializing in sort of bespoke solutions for our industrial customers because as you know every process and equipment on an industrial customer site is different, they need their sort of own solution set. So we’re excited about that team and already working with a handful of customers on some potential pilots.

Selman Akyol: Got it. All right. Thank you very much.

David Anderson: Thanks, Selman. Have a great weekend.

Operator: The next question comes from Chris Ellinghaus from Siebert Williams Shank. Chris, your line is open. Please go ahead.

Chris Ellinghaus: Hey everybody. Just a question on water. Nevada has some sort of troubled systems there, is that a viable state for you? And you know have you looked at it in the past?

Justin Palfreyman: Yes, hi, Chris. This is Justin. We have looked at that state in the past, and certainly it’s something that’s on our radar. To date, we have not found anything that’s been, you know, met our investment criteria, if you will. But that doesn’t mean that in the future an opportunity won’t emerge.

Chris Ellinghaus: Okay. David, you talked about Singapore being at 40% for hydrogen, did they have significant embrittlement issues there. And what is the longer-term outlook for how do you mitigate the embrittlement question?

David Anderson: Let Kim take that one.