BayoTech, an Albuquerque-based hydrogen transportation company with plans to break into the hydrogen production market, on Thursday announced a partnership with Nikola Corp. (Nasdaq: NKLA) for hydrogen transport and offtake.
The agreement will see BayoTech purchase up to 50 of Nikola's Class 8 hydrogen fuel cell electric vehicles over the next five years, while the Phoenix-based transportation company will bring on up to ten of BayoTech's hydrogen transportation systems. BayoTech officials declined to disclose the financial details of the partnership.
Part of the agreement will also see Nikola Corp., through its HYLA brand, take delivery of hydrogen produced at BayoTech production hubs as the Albuquerque company's "anchor hydrogen offtake customer," according to a BayoTech news release. The first of those production hubs is set to come online outside of St. Louis, Missouri, before the end of the year.
"We're immensely proud to be an industry leader in our commitment to deliver hydrogen to local customers via zero-emission fuel cell trucks," Mo Vargas, the president and CEO of BayoTech, said in a statement. "Partnering with forward-looking companies like Nikola allows us to accelerate the deployment of our hydrogen hub network and stimulate the growth of the hydrogen ecosystem."
BayoTech is in the process of "moving into a new phase," Catharine Reid, its chief marketing officer, told Albuquerque Business First. Previously, the firm had been focused on generating revenue primarily through its high-pressure compressed gas transportation and storage modules; BayoTech has delivered over 700 of those systems since 2001, according to its website.
But with its first hydrogen production plant set to start producing the element soon in Wentzville, Missouri, BayoTech wants to pull in more money through commercial sales of its hydrogen. It's currently in the process of establishing commitments with different customers to buy its hydrogen, which Reid said BayoTech wants to have in place before production starts.
And alongside the Missouri hub, BayoTech has two more planned in California over the next couple of years — one at the Port of Stockton, and another in southern California, although the company declined to disclose the name of the city where it'd be. It wants the Stockton location to start producing hydrogen in 2024.
BayoTech's hubs are smaller-scale, localized hydrogen production facilities the company hopes to build in key spots across the country and, eventually, overseas. Albuquerque could be a future site for one of those production hubs, but it'd be past 2024 and would depend on the demand for hydrogen in New Mexico.
Besides Nikola Corp., Reid said BayoTech has other companies currently signed on to take its hydrogen but wouldn't disclose their names.
The Phoenix-based clean transportation company, through its HYLA brand, received a $41.9 million grant earlier this month to set up six new hydrogen refueling stations in southern California. It announced a round of layoffs last month, with the majority affecting its Arizona workforce.
Nikola Corp. launched its HYLA brand in January this year to represent its hydrogen business, which includes securing supplies of clean hydrogen to then distribute to customers, the company's president of energy, Carey Mendes, said at the time.
BayoTech plans to use both renewable and non-renewable natural gas to produce its hydrogen. It anticipates that its Missouri facility will produce around 600 kilograms of hydrogen per day and that its California site could produce up to 2,000 kilograms of hydrogen per day, Reid said in a previous Business First interview.
