ASX-listed company Gold Hydrogen has announced today (Tuesday) that naturally occurring hydrogen has been detected at the surface of “multiple locations” in PEL 687, an area in the state of South Australia which it has licensed for exploration.

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Natural hydrogen, which can be formed in the earth’s subsurface through a variety of routes (see factbox below) is expected to be extremely cheap to recover, with estimated cost of production at a well in Mali below $0.50/kg.

Depending on additional transport and storage costs, it could be even cheaper than grey hydrogen made from unabated fossil gas, although the emissions footprint of exploration and drilling is yet to be determined.

But commercially exploitable reserves of natural hydrogen have yet to be discovered outside of Mali, where it is burned to generate electricity for a local village.

The stage-one survey was conducted by Australian government agency Commonwealth Scientific and Industrial Research Organisation (CSIRO) to test soil for so-called “white” or “gold” hydrogen across 80 different locations on Yorke Peninsula, which includes the PEL 687 area.

CSIRO has reported to Gold Hydrogen that its survey has measured levels of hydrogen which indicate the presence of natural H2 seeping up from undergound, with measured values noted as “moderate” at a few locations.

The survey also detected helium in multiple locations, which Gold Hydrogen says could be due to natural decay of geological elements in the crust.

Independent technical experts working for Gold Hydrogen suggested that this seepage of hydrogen along geological faults could imply that the gas has been generated in the subsurface, migrated upwards and filled a subsurface reservoir covered by a seal to prevent complete escape of the accumulated H2.

The company’s “best estimate” for hydrogen resource in PEL 687, calculated in September 2021, is 1.3 million tonnes of H2, although its low-case sits at around 207,000 tonnes. And it estimates a high case of 8.8 million tonnes of the zero-carbon gas in the block.

In 1931, naturally occurring hydrogen was found in three samples taken in the area during oil & gas exploration, at depths of 240.8 metres, 262.1 metres, and 507.8 metres.

The Australian firm plans to drill its first well to determine whether there is hydrogen accumulated underground in the licensed area this October.

A second-stage soil-gas survey, which would involve more long-term measurement, is also tentatively scheduled for late 2023 to early 2024.

Key natural hydrogen production processes, environments and locations

There are six known ways in which hydrogen is produced naturally:


In which the mineral olivine located in mid-ocean ridges or ophiolites (a geological formation where sections of the Earth’s mantle rise above sea level) is weathered to form hydrogen-rich fluids. This has been seen in the Semail ophiolite, in the Hajar Mountains of Oman. Under pressure and high temperatures, water can react with these iron-rich rocks to produce H2.

Radiolysis of water

Radioactive elements in the Earth’s crust — for example in crystalline basement rocks with high content of uranium, thorium or potassium — decompose water molecules trapped in causing a hydrogen pocket, as happened in South Australia.

Deep degassing

In which “primary” hydrogen (a single hydrogen atom attached to a single carbon atom) escapes from deep within the Earth’s crust. This has been seen in Nebraska, in the US.

Iron reduction and sulphur oxidation

Ferric iron in a black smoker (a subsea hydrothermal vent formed from iron sulphide deposits) is reduced to ferrous iron and hydrogen sulphides.

Thermal decomposition of organic matter

In which ammonium compounds located in deep sendiments decompose under high temperatures to form hydrogen and nitrogen, for example in hydrogen-nitrogen gas seeps in Oman.

Biological activity

Hydrogen is produced by microbes living in the Earth’s crusts, usually co-existing with hydrogen-consuming microbes and found via sediment or aquifers. This has been observed in the coal beds of the Powder River Basin in Montana, US.

Source: Rystad Energy