INEOS to Back Clean Hydrogen Fund in London Listing

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HydrogenOne Capital Growth will receive a minimum of £25 million ($34.6 million) pounds as a cornerstone investment from INEOS Energy amid plans to list on the London Stock Exchange’s main market, the companies said on Monday.

The fund, which will predominately invest in private clean-hydrogen assets, aims to raise £250 million ($346 million) in an initial public offering

“We want to be able to compete in the energy transition,” Ineos Energy Chairman Brian Gilvary said in an interview with Bloomberg on Monday. The investment into HydrogenOne “gives us a lens into how the market will unfold,” as Ineos will have a board seat as well as investment rights.

While hydrogen remains a relatively small part of the global energy mix, it is expected to gain prominence as part of the energy transition. Today, most hydrogen is made from emissions-emitting fossil fuels, but governments worldwide are offering funding for green hydrogen projects -- the cleanest variety of the gas which is produced using renewable energy -- with Royal Dutch Shell Plc beginning production at a German refinery last week following investment from the European Commission.

“This will be a platform to potentially scale up investment as economic returns become available,” which could happen by the end of the decade, Gilvary said.

HydrogenOne was set up last year by energy veterans JJ Traynor and Richard Hulf. The fund will place ordinary shares of 1 pence each at an issue price of 100 pence apiece. Panmure Gordon is acting as sponsor, financial adviser and joint bookrunner, while Kepler Cheuvreux is also acting as a bookrunner.

Ineos Energy was set up by Ineos Group late last year and incorporates the company’s oil and gas assets as well as low-carbon technologies. Earlier this year it bought Hess Corp.’s oil assets in Denmark and sold its business in Norway as it sought to lower its exposure to gas in its portfolio.

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