To evaluate a commercial partnership proposal, ADI engineered a strategic framework for an underground hydrogen storage cavern asset. The analysis assessed economic trade-offs between alternative progress payment schedules and long-term capital recovery under Section 48E tax credit guidelines, providing clarity on commercial risk boundaries.
The client
Emerging midstream infrastructure operator
The situation
An infrastructure operator needed to evaluate the commercial viability and structural risks of a proposed underground hydrogen storage partnership.
ADI’s contributions
Asset ownership structure analysis
Analyzed IRA Section 48E guidelines to determine how alternative ownership structures impact tax credit eligibility.
Capital recovery pricing analysis
Developed pricing guidance and cash flow models comparing multiple progress payment options to account for the time value of money.
Commercial agreement risk assessment
Evaluated commercial risk exposures and liability boundaries within the proposed framework to recommend protective commercial terms.
Capital protection risk analysis
Assessed contractual and commercial mechanisms to protect long-term capital investments.
Key outcomes
- Enabled the client to avoid an unviable partnership structure and protect development capital by identifying critical regulatory compliance barriers.
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