KBR, Hazer enter alliance agreement for licensing, commercialization

Hazer Group entered into a binding Alliance Agreement with Kellogg Brown and Root for the commercial deployment and licensing of Hazer’s proprietary methane pyrolysis technology. Under the Alliance, KBR (KBR) will be Hazer’s exclusive global partner for the marketing, licensing and deployment of Hazer technology to customers in the ammonia and methanol markets. KBR and Hazer will also work closely to pursue licensing opportunities in decarbonizing hydrogen markets beyond these exclusive markets. Under the Alliance, Hazer and KBR will collaborate on the up-scaling, marketing and licensing of the Hazer technology for commercial deployment. Under the terms of the agreement, KBR will be Hazer’s exclusive licensing partner for the ammonia and methanol markets while working closely in other hydrogen sectors. The initial term of the Alliance is six (6) years with an option to extend subject to the achievement of performance metrics. The parties have agreed to collaborate on the development of a design package for Hazer facilities targeting hydrogen capacities of 50,000+ tonne per annum as well as the global sales, marketing and licensing of Hazer’s technology. Hazer will be KBR’s exclusive methane pyrolysis technology provider. The total cost of the Alliance work program is anticipated to be in the range A$3.0-5.0 million of which KBR will contribute approximately A$3.0 million over the work program period. The Alliance is underpinned by performance objectives with a target of securing multiple firm licensing opportunities during the initial term. In respect of royalty and licensing fee sharing, the Company will keep the market informed as license arrangements are signed. Hazer’s pre-existing portfolio and opportunity pipeline is not subject to the terms of the Alliance. An incentive structure applies in the event KBR secures a license for the first commercial unit secured within three years. There is no financial impact at this stage as no client agreements are in place. In other terms, the agreement can terminate if licensing performance metrics are not met. Hazer retains full ownership of its existing intellectual property. The agreement otherwise contains terms customary for an arrangement of this kind.