Progress Update on Hydrogen Supply Chain and Prototype Tank Activities

HIGHLIGHTS:

• Significant progress made on finalising a Term Sheet with Uniper and Norwegian Hydrogen for a Hydrogen Sale and Purchase Agreement (SPA) outlining key commercial terms, including targeting a 10-year offtake for over 40,000 tonnes per annum of hydrogen. Execution is imminent and expected to be executed after the European winter holiday period.
  
• Completion of the Fiska Facility sale expected around 1st January 2025 will enable Provaris to move forward with a lease agreement with the new owners and finalise the purchase of robotic laser- welding requirement to restart its Prototype Tank fabrication and testing program.

Term Sheet for Hydrogen Supply and Offtake progressing towards execution

During December 2024, Provaris , together with Uniper and Norwegian Hydrogen, made significant strides towards the finalization of a Term Sheet that outlines the key terms for negotiation of a long term Hydrogen SPA. This agreement targets a 10-year offtake contract for over 40,000 tonnes per annum of renewable green hydrogen from the Nordics to Germany.

The Term Sheet represents a critical milestone in Provaris’ plans to establish reliable, long term, and low cost hydrogen supply utilising Provaris’ proprietary H2Neo carriers and H2Leo barge technology.

The completion of the Term Sheet is imminent however final execution may be slightly delayed by the winter holiday period in Europe, which concludes on 2 January 2025. The Term Sheet also supports discussions established with shipyards for newbuilds and shipowners for Time Charter of the carriers.

Provaris and Uniper continue to focus on optimal shipping, compression, and import terminal solutions in North-West Europe, ensuring a flexible and efficient transport network. The collaboration with Norwegian Hydrogen, including the Fjord H2 project and other Nordic sites, aims to provide RFNBO-compliant hydrogen delivered in compressed form. These initiatives support Uniper’s hydrogen portfolio requirements and align with Provaris’ vision of delivering cost-effective, low-emission supply chains from production to end-user markets.

Restart of Prototype Tank Program at Fiskå Facility and completion of final Class Approvals.

Provaris has maintained regular engagement with the secured lenders and their appointed Advisor regarding the ongoing sale process of the Fiskå Facility and associated assets. While the process has taken longer than initially anticipated progress has been achieved over the past 6 weeks with finalization and title transfer to the new owner anticipated on or around 1st January 2025.

Securing a lease agreement for a portion of the Fiskå Facility’s production floor and associated office space will provide for a resumption of the Prototype Tank fabrication and testing program. The lease is close to finalization and will provide ample room for future growth, including the potential production of small-scale hydrogen storage tanks that can be an important step towards improving the operational economics for industrial hydrogen users.

Concurrently, Provaris has advanced negotiation of the key terms for an asset purchase agreement to acquire the installed Production Cell (including robotic arms, laser-hybrid welding equipment, pedestals, jigs and related tools) essential for the Prototype Tank construction. Owning these valuable production assets and associated intellectual property will strengthen Provaris’ manufacturing capabilities in Norway and potential licensing opportunities within Europe and Asia.

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