TDAs this is a flash report, there is some potential for them to raise their current target which is already almost a double from here ($16.00). GLTA
Advantage Energy Ltd.
(AAV-T, AAV-N) C$8.08
Entropy Showing Commercially Successful Capture Cost
Event
Entropy Data Shows Commercially Successful Capture Costs
Impact: POSITIVE
Entropy Operations Exceed Previous Short-duration Test Data: Phase 1A (~47,000 TPA) of Entropy's operating CCS project at Advantage's Glacier gas plant has now been on stream since Q3/22 (see release here)
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The project posted capture rates of 90-95% from the 5.3% CO2 flue gas. This is in line with the previous shorter-duration results using proprietary solvent Entropy23 (28hr test) and the generic solvent MEA.
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The heat duty of Entropy23 shows material improvement versus previous data points. Specifically, the heat duty using MEA was stated to be 3.3 GJ/T, which improved to 2.9 GJ/T under a short-duration Entropy23 test in Q3/22, to 2.4 GJ/ T currently.
Updated Future Capital & Operating Cost Estimates Provided
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Glacier Phase 1A cost $31mm (previously disclosed), which equates to a capital cost of $660/TPA (~$22/T over a 30-year project life). Looking ahead, Entropy anticipates future costs of <$475/TPA ($16/T over a 30-year project life).
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From an operating-cost perspective, Phase 1A is currently running at $30/T, but Entropy anticipates this to trend down to $27/T. Looking ahead, Phase 2 operating costs are anticipated to improve to <$22/T.
Our View: This is the first time we have seen combined capital and operating cost data from a running modular CCS project. This MCCS technology appears to have a carbon capture cost of ~$52/T, which is likely to trend lower with future projects. We view this as success as it is below the Federal Canadian carbon tax that is set to escalate to $65/T (on April 1) and well below the U.S. government carbon price of US$85/T.
Third-party Commercial Projects Coming: ATH's Leismer project (440,000 TPA) is shovel-ready, but awaiting a disposal permit. Meanwhile, the company has signed an MOU with CRC-NYSE in the U.S. for a 400,000 TPA project that would benefit from carbon price certainty of the current U.S. framework.
What Entropy Value is Factored into AAV's Share Price: Based on recent underperformance of AAV relative to its closest peers, we no longer believe any value is factored into the equity for Entropy.