Participants

Bryce Mendes; Director of Investor Relations; NET Power Inc

Daniel Rice; Chief Executive Officer, Director; NET Power Inc

Brian Allen; President, Chief Operating Officer; NET Power Inc

Akash Patel; Chief Financial Officer; NET Power Inc

Thomas Merrick; Analyst; Janney Montgomery Scott LLC

Betty Jiang; Analyst; Barclays

Pavel Molchanov; Analyst; Raymond James & Associates, Inc.

Noel Parks; Analyst; Tuohy Brothers

Presentation

Operator

Greetings and welcome to the NET Power Third-Quarter, 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.
Once you require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Bryce Mendez, Director of Investor Relations. Thank you. You may begin.

Bryce Mendes

Good morning and welcome to Net Power's third quarter 2024 earnings conference call with me on the call today. We have our Chief Executive Officer, Danny Rice; our President and Chief Operating Officer, Brian Allen; and our Chief Financial Officer, Akash Patel.
Yesterday, we issued our earnings release for the third quarter of 2024 which can be found on our investor relations website along with this presentation at ir.netpower.com. During this call, our remarks and responses to questions may include forward-looking statements.
Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with our business. These risks and uncertainties are discussed in our sec filings. Please note that we assume no obligation to update any forward-looking statements.
With that, I'll now pass it over to Danny Rice, Net Power's Chief Executive Officer.

Daniel Rice

Good morning, everybody. And thanks for joining us. The team has some positive updates for you today. And as we've done on previous calls, I'll provide some overview comments before passing it over to Brian and Akash for the operational and financial updates.
We continue to focus our efforts on developing, improving our technology at the utility scale which starts with Baker hughes' validation testing at our laporte facility. We recently kicked off phase one of our equipment validation program with Baker at La Porte which will result in the down selection of the Oxyfuel burner. I'd like to extend a big thanks to our site team and operational partners for their hard work in getting us to this point.
We celebrate this milestone as it marks a critical step towards developing, improving our technology at the utility scale and we look forward to progressing through our outlined four phase testing program at the port with Baker Hughes. Now through 2026 we're excited to announce the selection of a lake as our air separation player for project premium feed. Marking another significant milestone for the team.
The air separation unit represents one of the major equipment components of a NET Power plant. We look forward to working alongside the lake team on project permian and future opportunities as we continue to build out our standardized NET Power plant design shifting gears.
We held an investor day in early September where we outlined a recent market study conducted in collaboration with Boston Consulting Group. In summary, the opportunity set for 24/7, low-carbon energy is immense and our targeted North American competitive markets of Miso Ercot PJM KSO and ASO, we view the serviceable opportunity as high as 2000 NET Power plants focusing on the areas with sufficient co two storage and infrastructure in place. And again, this opportunity set is before moving into regulated markets with utilities.
In our view by leveraging clean, cheap and abundant natural gas, NET Power presents as the lowest cost, quickest to market option to provide clean, affordable and reliable power. And we're focused on executing against our strategic pillars to ensure we can realize this massive opportunity set here in North America on the market front, we continue to believe the world will be short, clean baseload power and NET Power. We will be well positioned to be the first to market with a proven and scalable clean power solution.
We've seen a handful of announcements lately from tech firms with early stage nuclear companies but load growth will not wait a decade for new generation solutions to be proven out with project premion coming online in 2027 plus 2028.
We'll be in excellent position to capture a meaningful portion of this demand. Nearly a decade ahead of other potential solutions and it's not just getting to market sooner, but it's doing so with solutions without compromise. One of the dual challenges the grid is facing is filling large baseload growth with new clean power while also supplying flexible peaking power to the grid.
There's no solution today that can do both at the same time. But our oxy combustion cycle inherently can do this. One of the features we've been advancing more thoroughly is the application of our oxygen based storage which acts as a battery for our ASU auxiliary load.
Our oxy combustion process utilizes oxygen to generate clean power and storing excess oxygen on site enables us to utilize this oxygen in lieu of the air separation unit which increases our net electric output. On slide 6, we have illustrated this configuration which we think is an entirely practical and economic way to provide power to co located assets like data centers while simultaneously providing peaking power to the grid.
So the data center complex always receives its 24/7 power and the grid receives the peaking power of our oxygen based storage and in terms of storage and dispatch capacity a day's worth of oxygen storage equates to 1.2 gigawatt hours in dispatch can be anywhere from 15 to 80 megawatts.
So we're talking extremely large energy storage potential, which we think can be far more economical than traditional battery storage in commercial conversations. The early response to this hybrid application has been extremely positive and it's something we're looking to incorporate into many of our originated projects. Additionally, we'll have a small oxygen storage at project permian to help validate this application.
While the future clean energy mix will certainly require multiple technologies, it's a good time to reiterate what NET Power is focusing on today, we are actively progressing the financing and supply offtake discussions for our first commercial scale plant project premium based on current market pricing and conditions.
Getting our first utility scale plant financed and operational with safe reliable operations will change the world and catalyze our future fleet deployments.
Meanwhile, we continue to push forward on the origination front. Our origination approach gives us total creative latitude of how we commercialize our technology and how we structure the financial and operational terms around future NET Power clean energy hubs.
We're developing an extensive shadow backlog of projects by tackling the low dollar early development work. Now such that when our first utility scale project is up and running, we have that visibility into where the next 10 plus originated hubs can go with each hub with the ability to support 2 to 20 NET Power plants.
At our first originated project in northern Miso op one, we continue to support the miso interconnect process and are progressing through the site and permitting phase. Our interconnect there is sized for 300 megawatts.
So our plan here is power from the first plant or two goes to the grid to bring reliable clean power to miso and any future plants can be connected to the grid for peaking. While baseload is servicing co located load from data centers. We're in a region that we believe could have total co two storage capacity for a dozen or more NET Power plants up in Alberta.
We recently signed an MOU with a local partner and are jointly progressing through the project feasibility phase and Alberta is quickly becoming a focus area for data center growth because of favorable ambient temperatures for data center, cooling, proximity to low cost natural gas for energy in favorable industry and regulatory environments that support economic growth back in the US.
We're pursuing several MOUs in the western part of the country to establish NET Power hubs. Again, a combination of providing clean power to the grid to restore reliability plus providing co located power for data centers. This is the right technology for what the world needs for the coming decades.
And we look forward to sharing more information on these opportunities when appropriate quick reaction to the election to the US election. We're on the doorstep of commercializing a breakthrough solution that both sides can get behind. One that the power sector wants to succeed and one that the tech industry needs in order to meet their clean energy needs.
We look forward to working with the new administration to facilitate broad commercialization of our clean, affordable reliable power solution. So with that, I'll hand it over to Brian for the operational updates.

Brian Allen

Thanks, Danny. I would like to echo Danny's sentiment and congratulate our Laport team and our partners that have worked tirelessly this last year to upgrade the facility and begin plant and combustor test grade commissioning for phase one of the Baker Hughes validation campaigns.
Thanks to the Baker Hughes team and thanks to Constellation site staff and leadership team that supported us together, we manage a set of highly skilled contractors and craft that worked over 140,000 hours to complete these upgrades all while working safely with no recordable injuries.
They installed several new pieces of major equipment welded over 2,000 ft of stainless steel piping and installed approximately 80 new instruments and over a dozen new valves to improve the facility's operational flexibility for the upcoming campaigns.
It is worth noting that while the initial validation campaigns are targeted towards Baker Hughes combustion system, NET Power will benefit immensely from the overall plant's operation.
We have incorporated lessons learned from prior testing, not only in the physical facility design, but in the control system and the way we collect and utilize our plant data, the additional plant data will allow us to further improve our plant operations and to calibrate our process simulation models that were the original basis of the plant.
On our goal is to develop highly accurate digital twin virtual models of our demonstration plant of the port and our utility scale plants like project Permian.
We can then apply AI machine learning algorithms to the digital twin to help our engineers more rapidly improve our plant design and performance.
Turning to slide 10, the operations team is executing on schedule against our highlighted equipment validation campaigns. And Baker, the first two phases of equipment validation are being conducted in a Baker's used combustor test rig shown on the bottom right of the flood.
The test rig was assembled in Baker Hughes Florence facility and installed a Net Powersport demonstration facility during the third quarter of 2024.
We recently commenced commissioning of the first phase of Baker Hughes equipment validation at Laport on schedule. This first phase will ultimately result in the down selection of the combustor burner that will be used in future validation phases at laporte as well as project permian and beyond.
In the past couple of weeks, we have been flowing co two and oxygen streams through the test rig and dialing in the upgraded plant equipment and controls to ensure the conditions required by Baker use specification are being achieved. It is great to see the plant operating as intended and embarking on this multi year campaign.
Upon successful completion of phase one testing, we will roll into phase two, taking the selected oxyfuel burner and testing it alongside a combustion liner and other hardware to form a single demonstrator size combustion can.
The next slide shows some of the Baker Hughes hardware currently in manufacturing in Florence or at their suppliers' facilities, as we have mentioned in previous communications, the Baker team is dual tracking the development of the demo scale turbo standard for the port and utility scale turbo standard for project permit.
The left hand side of this slide shows some of the demonstrator turbo standard components including a single bucket, also known as a blade, a nozzle segment, also known as A B segment and the casting of their primary outer casing that will house the combustion camps.
On the right hand side, you can see the utility scale turbo expanders external casing along with the simplified 3d utility scale turbo standard model.
It is great to see hardware in production to meet our project permian schedule and demonstrates the concurrent engineering approach that NET Power and Baker Hughes are taking in our turbo expander joint development program on slide 12. We provide a few updates on project permit.
We remain on track for initial power generation in the latter half of 2027 to the first half of 2028. Yesterday, we announced our selection of Air Liquid as the air separation unit supplier for the project. Permian Feed Air Lake has been an outstanding partner for years at La Porte where their adjacent ASU facility supplies us industrial gasses and other services.
We are excited to continue our relationship with a company that shares our values of technology innovation and focus on sustainability. Regarding the ASU design we are progressing the feed for a two by 50% configuration for project permit.
This configuration entails construction of two separate adjacent Asus, each one delivering approximately 2,000 tons per day of oxygen to meet our total requirements of approximately 4,000 tons of oxygen per day.
Asus of this smaller size are easier to transport project permian and the majority of the sites we anticipate building NET Power plants.
It is also a more prevalent size in the industrial gas industry and will allow us to leverage a more robust supply chain as we scale into manufacturing mode in the future.
During Q3, we publicly announced the signing of our third limited notice to proceed with Baker Hughes for a total of approximately $90 million of purchases for long lead materials required to meet schedule for the utility scale turbo expander and related key process equipment.
Additionally, to preserve our schedule, purchase orders were placed for identified long lead electrical equipment denoted here on the slide.
The feed for project permit with Zachary Group remains on schedule to conclude in the fourth quarter of this year, which will include the cost estimate schedule and overall plant design deliverables for the project.
Moving into next year, we plan for Zachary's engineering team to roll out of the feed phase and write into continued engineering work with substantially the same team.
This work will include detailed design value engineering where feasible and not impacting schedule and incorporation of Air Lake's ASU feed into the overall plant EPC contract.
We are underway with Zachary preparing the contract and execution plan for the kickoff of the EPC phase and beginning of construction for the second half of 2025.
I will now pass it to Akash for the financial updates.

Akash Patel

Thanks Brian. As mentioned in Brian's comments, Zachary's estimating team is hard at work preparing the total cost roll up for project permian which we expect to receive in December.
This initial estimate will be subject to review and negotiation prior to the EPC contract being executed.
Similar to other market participants, we expect to see continued inflation in capital equipment and construction costs compared to our previously provided guidance of [1.1 billion] for project permit.
Importantly, we also expect this inflation will be offset by the continued improvement in the market price for clean, reliable power.
We are in active negotiations for project premiums, key supply and offtakes and look forward to sharing more information as they are finalized.
Additionally, we continue to work with our existing owner group on the capital formation for project permit which we expect to finalize after fee conclusion and supply and offtake agreements moving to slide. 14 netpower continues to prudently deploy our capital ending the third quarter of 2024 with approximately $580 million of cash and investments. In the third quarter a cash flow used in operations was approximately $8 million which included a cash payment of approximately $5 million under the Baker Hughes JDA.
As mentioned previously, we expect cash flow used in operations to continue increasing as we build out the organization progress. The joint development program with Baker Hughes and ramp up activity at La Porte for the quarter.
Our total capital expenditures were approximately $22 million comprised of approximately $10 million of capitalized costs associated with ongoing project premium development activities and approximately $13 million spent on the port modifications and upgrades out of testing.
Net power's fully deleted share count was approximately 249 million shares as of September 30. This was comprised of approximately 215 class A and class B vested shares, 19.5 million shares issuable upon the exercise of outstanding public and private warrants which if exercised would give NET Power an additional $225 million of cash, 2.7 million shares subject to earnouts or vesting requirements, and approximately 11.5 million authorized shares issuable pursuant to the joint development agreement with Baker Hughes. For a detailed breakdown of our diluted share count, please refer to our annual and quarterly financials on file with the SEC.
That concludes our prepared remarks. I'll now pass it back to the operator to open up the line for Q&A Thanks.

Question and Answer Session

Operator

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions)
Thomas Merrick, Janney Montgomery Scott.

Thomas Merrick

Yes, good morning. Thanks for the time.
A couple of questions, I'll start with kind of integrating multiple NET Power plants on a single site. Just curious if you can walk through both the opportunities for cost savings and just the challenges of integrating multiple plants. You know, things like shared control rooms, CO2 export compression, a su those types of things. And then I have a follow up on the capital equipment inflation.

Daniel Rice

Hey Thomas, this is Danny. Good to have you on today. I think, I'll, I'll cover sort of just like the economic proposition and then Brian can cover some of the technical operational nuances of it. I think, look at project perm in the first plant. You know, it's going to be first of a kind, the most expensive plant we ever built and it's going to be a single unit.
I think as we look at just getting down the cost curve, the CapEx curve for all future plants, those capital improvements are really going to come from a combination of just getting into manufacture mode and deploying more of these plants, just continuous improvement and iterations from one generation to the next.
And, but we really do see like the largest cost savings in terms of, overnight cost of a new NET Power plant is really going to come from being able to deploy multiple plants together in a fleet configuration.
So I think the nice thing for us sitting here today is, not only is it more economic for us to deploy multiple plants together, but it's also what the market is looking for in terms of just new load growth and not just load growth, across the entire region, but load growth at a concentrated site where we are location, could see demand for a gigawatt or a couple of gigawatts of power.
And so what we're really doing now on the origination side is it's really increased that filter level of the scope and the size of the sites that we're looking for are becoming a little bit bigger. I think the nice thing for us is we're starting with such a small footprint, we're talking about 15 acres for each of these plants.
And so we're really now starting to look for locations where we have 100 or 200 acres of land, which is not a lot of land I think, especially when you compare it to the other clean alternatives that need a couple of 1,000 acres.
So, we're talking about being able to have a gigawatt scale sort of fleet deployment on 60 acres. And that's a pretty incredible set up for us that allows us to really start looking at, a lot of, a lot of areas and opportunities that I think most other potential solutions aren't able to look at. So the fleet sort of deployments are really what we're starting to look at.
And I think just kind of part and parcel of that is if you're looking at just the sequencing of those deployments, what does it look like? And I think I kind of with what we're looking to do up inso and we'll probably do in some of these other regions which is the first plane or two are going to be going into the grid. The grid needs that power right away.
I think a lot of the folks in the data center side, especially because this technology is a new type of gas power generation technology. They're going to want to have that redundancy on the power, but they're also going to want to see it active in that area.
And so I think just naturally the way you're going to see it play out is the first batch of plants go on to the grid that also then starts to become the backup power for future deployments. And then those future deployments can be co located behind that meter. So you have the redundancy of the plant going into the grid. You have the co co located power behind the meter.
And like we mentioned in the prepared remarks, you're always going to have that peaking storage capability of the oxygen ox load storage. So we're always able to provide that peaking power back to the grid even when we're servicing that baseload behind the meter co located, but maybe I'll turn it over to Brian a little bit to give you guys some color on how we're feeling about just the operational side.

Brian Allen

Yes, thanks, Danny. I think you covered it. Well, just a few other points is, it's not always as if you're doing multiple plants side by side. It's not always necessarily scaling up the equipment. So we would foresee of course, it's the same turbo standard, the same compressors pumps, but there is significant construction savings just for the EPC to do duplicate power trains.
And this plays out in the power industry when you do, let's say a combined cycle plant and you're doing multiple turbines that are the same. There's, there's just significant learnings on the site and spreading of, let's say your overhead, indirect construction costs across a larger facility.
So and then as you said, in the question, there are some items that don't duplicate. You're still going to have one control room and one set of water treatment So, so there are fewer savings by combining multiple plants with the same site. And then in other cases, it's savings on construction doing project over project.

Thomas Merrick

Thanks helpful for, for both those. And then on the inflation of capital equipment. Just curious on a couple of things first, is, is it electrical equipment and you know, broadbased across other components that you need, pipe valves, fittings, et cetera.
And then is it, are you seeing it more on manufactured finished products or are you also seeing it on the upstream materials for those goods? And that's it for me. Thank you.

Brian Allen

Yes, I'll take that. I mean, right now, what we're getting quotes for directly is the large engineered equipment. So definitely we're seeing it there. If you look at heat exchangers, turbomachinery electrical equipment, those are the things that we've been either purchasing long leads or getting indicative quotes with our partners in terms of the bulk, all of that will be coming through really the Zachary feed. So we anticipate, whether it's pipe fittings, valves, all the smaller commodities that will come through that feed estimate. We do anticipate increases, but can't really put an exact number on that at this point.

Akash Patel

Yes, the only other thing I'd add to that is we do have a playbook on negotiating for these things. So we're, we're, we have received indicatives, we have still to go through the negotiating process. So you need more that we can really say on that point.

Operator

Betty Jiang, Barclays.

Betty Jiang

Hi, good morning.
So I will want to, I want to ask about this oxygen storage opportunity here. One just help us frame you. You talked about one day of extra oxygen storage is equating to 1.2 gigawatt hour. Just how much like how much spare capacity is currently baked into the base power plant design to generate that excess oxygen currently? Or is that a separate design decision that you have to make from the get go to add in that optionality? I initially.

Daniel Rice

Yeah, Freddy, thanks for the question. I'll let me turn it over to Brian to give you just some of the high level things I would say before I do. You know, it really does become a very customizable sort of decision of how much storage do you want to have on site? And how much excess oxygen do you want to be able to produce in order to recharge and the battery storage? So it really is going to be on an application by application basis. How quickly do you want to recharge and how quickly do you want to, how much, how many hours or days of storage do you want to have?
Right? Any, any, any new you want add to it?

Brian Allen

Yes, sure. So the oxygen storage is inherent in our cycle. You know, we use gaseous oxygen, but we would store liquid oxygen as let's say backup. So there always will be some liquid oxygen tank at the site. It's just a question of how do you size it for the minimum we would need just for backup redundancy for startup and so forth or do you oversize it for this storage mechanism?
And that's why we put a range on the slide that, that you saw 10 to 25% of baseload. So as Danny said, we'll work with each application including on Permian. We're considering this right now in our feed, how much we would potentially want to oversize the lock tank?
But yes, it really comes down to how you would treat a battery, how you would look at the economics and pay back of charge and discharging. So it can be oversized. Of course, it takes energy to, to fill it which would affect your baseload capacity. So this will be something we look at application by application.

Betty Jiang

No, that's helpful. So maybe thinking through the economic side of this solution, would you be thinking about monetizing this separately one like as in a single po the a single NET Power plant? But but the base load is being monetized separately from the peak power.

Daniel Rice

Right? Yes, Betty, I think, if you think about it through the lens of, of you know, just selling a license to build a NET Power plant. You know, from our perspective, the customer is really going to look at what's the, what's the total intrinsic value of the NET Power plant. You know, I think everything that we've really been doing internally, to date has really been focused on, the baseload power output of this, of this facility. And we really haven't been trying to ascribe much value to this peaking this peaking supplement, which doesn't doesn't eat into the baseload. It's really just supplemental to it.
I think now that we kind of see what's kind of happening in the market where you're starting to see these data centers trying to put their power onto these grid systems. You're starting to see a lot of reluctance and just resistance from a lot of these system operators both on, front of the meter, but also on the behind the meter colo situations, this sort of peaking capability that we can provide to the grid for their benefit.
While at the same time servicing the co located data center really is a solution where I think everybody gets what they want. The data center gets their 24/7 power 365 days a year for a set amount of power. And at the same time, the grid gets the dispatchable peaking power that it needs to be able to meet its nighttime, power load, really, if you look at just the cycling of renewables, from daytime to nighttime, that that's what the grid needs is that sort of dispatchable, response power.
And so, right now, I think there's a little bit of a log jam with what's happening on the data center side, both within the RTOS, but also at ferc where they're really trying to figure out how are we able to meet this load growth with new generation without it compromising just the reliability of the grid system. So we're kind of just sitting here today with this, inherent solution.
That's part of the oxy combustion process where we're kind of saying we can do both, we can, we can provide the baseload, co located power that the data centers need while also at the same time from the same asset meet the peaking capabilities and p and demand that the grid needs. And so there's real value there, right?
If you can provide peaking power to the grid at higher than just 24 hours around the clock prices, there's real value there. And you know, back to Brian's point in mind earlier on just how quickly you can reach dispatch.
You know, if that is like a nightly occurrence or if you're in an area where there's, weather events, whether it's cold winters or hot summers, you can have those seasonal opportunities to be able to capture much, much higher prices. So there really is a ton of intrinsic value in this oxygen storage peaking capability.
But again, it's going to be customized for each market. But I would say if you look at just like you know the intrinsic value of this oxygen piece relative to the cost to install oxygen storage tanks our back of the envelope math suggests this is probably the cheapest form of long duration energy storage.
Granted this energy storage is really in the form of auxiliary load, right? Because you're able to turn down your au to pick up where that energy is coming from. But you know, no matter how we slice it, this becomes probably the lowest cost long duration energy storage in the world.
So it's a really, really interesting one and it's something that the market really needs given the struggle to be able to meet both grid demand for reliable power along with being able to meet this 24/7 large load that's coming down the pike from data centers.

Betty Jiang

Thank you very much for that color.

Operator

Pavel Molchanov, Raymond James.

Pavel Molchanov

Yes, thanks for taking the question in your prepared remarks. You gave some thoughts kind of postelection. I I wanted to zoom in specifically on 45 Q. You know, obviously, there will be some conversations in Congress about making changes to the Inflation reduction Act, potentially, cutting some of the stuff out of there. Any concerns that 45 Q might be on the proverbial chopping block.

Daniel Rice

Yes. No, that's a great question, Pablo and good to have you on the call with us today. No, not really. You know, I think when we look at, all of the things that are eligible for the IRA and what things really kind of become those, bipartisan solutions.
I would say carbon capture is probably near the top of that list because I think if you take a step back and look at what carbon capture enables us to do. One, it's we think it's the most impactful way to be able to decarbonize.
And I think if you look at just what NET Power is able to offer, just being able to replace every existing coal fired power plant and carbon natural gas power plant in the United States with a NET Power plant, you've eliminated total co two emissions from us power generation and that is the largest source of emissions in the United States is from power generation. So it is the most impactful thing to be able to decarbonize.
And so that that's certainly one thing that pleases certainly one side of the aisle more than the other.
But I think more importantly, especially within this new administration, NET Power is a unique technology and that it actually leverages fossil fuels. And I think if you look at everything that Trump has been advocating for increasing possible fossil fuel development in order to be able to lower energy prices to consumers.
And so NET Power, it's, it's a natural gas fired power plant. So we actually use that feedstock to our benefit. And certainly within the 45 Q, it's not just using natural gas, but it's developing new wells, using the natural gas and the oil industry to be able to do that work for us.
And so, carbon capture really is a tool that's predicated on the success and the skills of the fossil fuel industry. So I would say if there's really anything within the IRA that, that makes it through completely unscathed, it's going to be carbon capture for all the reasons that I just mentioned.
And then obviously, the other thing that would be really, really nice to see is an administration that actually supports the 45 Q for EOR, right now there's a $60 per ton, 45 Q credit if you use the CO2 for EOR, does that go higher to be able to encourage and incentivize even greater oil production possibly.
It's certainly not our focus area. Our focus area is class six permanent geologic sequestration. But I think as we're being able to demonstrate with Project Premia in West Texas, there is a ton of economic and industrial value for being able to take that co two and use it in a really, really derisked way and enhance oil recovery applications. So that's what we're doing on project Permian to be able to derisk and catalyze our commercialization.
And again, that plays right into the skill set and experience of the fossil industry that has allowed the US to get to where it is today as an economic superpower. So we hope to see the 45 Q continue for something like NET Power. And again, we think if anything makes it through completely unscathed, we think it will be something like carbon capture.

Pavel Molchanov

I appreciate that, I guess in the, in that same context, I'm I'm sure there are kind of, backup plans, plan B for all eventuality. So maybe talk about the kinds of conversations you're having outside of North America. You know, what, what kind of the international opportunity set looks like?

Daniel Rice

Yeah, I would, I would say our primary effort especially because we're really focused on the origination front origination really is focused around North America. And the reason is fairly simple, North America is the market where these plants probably have the highest intrinsic value. And it's a function of access to the lowest cost natural gas in the world, access to great Co two sequestration potential where there is tangible value in the form of the carbon incentives from the programs like the 45 Q or from a carbon tax like you have up in Alberta, Canada.
And so North America is just a place where these plants have not just like the highest intrinsic value, but it's also just the largest markets for us to be able to scale and go after. So North America is certainly our priority. But as we look at some of these other markets that are around the world that are really, really interesting to us, Australia is starting to pick up steam in terms of interest over there. Southeast Asia is a little bit interesting.
I think the bigger challenge there right now is really figuring out where are they going to get access to low cost natural gas and what are they going to do on the sequestration side? And so as the market just continues to mature, we're really going to be focused on scaling up here in the United States. And then, as we've mentioned before, conversations in the Middle East are progressing.
You know, the Middle East is an interesting place just because they really do have some of the lowest cost gas on the planet and they do have major power ambitions that just continue to scale.
The biggest thing over there is that if they're going to be an incentive on the sequestration side, you can get paid for the sequestration rather than just allowing the free market to put a price on, on or a value on it. And so these are the markets are interesting Europes, Europe just needs to get its energy act together altogether.
But if they do that, it will certainly, I think it will, it will certainly lead people to see that, solutions like NET Power are going to be the lowest cost 24/7 clean Power Solution. It's just taken a lot of these countries a little bit more time to be able to get there really to be able to compete with the economics of projects here in the United States and Canada.
So we're focused, we think in the absolute rent markets, the absolute biggest markets in and it's nice that the US based technology is going to be, not just commercialized here in the US, but it's going to be scaled here in the US and Canada really for the benefit of global deployments further down the line.

Brian Allen

Thank you very much.

Operator

Thank you as a reminder. If you would like to ask a question, please press star one on your telephone keypad.
I am not showing any further questions. Oh, sorry about that. Our next questions come from the line of Noel Parks, Tuohy Brothers. Please proceed with your question.

Noel Parks

Hi, good morning. Just a couple of things one I was wondering about you mentioned that or, or one thing I've been thinking about is is some of the various types of partnerships that, that you already have in place and some of them, extending to additional regions. Is there any value in, in direct partnership with gas infrastructure or pipeline players? Because I'm assuming there are some sites with, pretty ready access to the gas supply that you'd need others where, upgrades or expansions might be, might be necessary. So just wondering if that fit into the picture where you are now?

Daniel Rice

Yes, it totally does. I think when we create that picture of all of the potential strategic stakeholders that need to come together or that would want to come together as part of these NET Power hubs. Certainly like the gas supply piece is a big one, right?
I think one of the interesting things that you're seeing in this space is the folks that do a lot of the gas transportation, whether it's through existing long haul interstate pipelines or just the regional, gathering systems in some of these basins where we're looking to deploy these plants.
A lot of those midstream companies are now starting to figure out I have a tangential skill set in providing co two transportation and sequestration. So a lot of the conversations that we're having with folks on the gas supply that happened to have just that regional presence.
They're also looking at how can we twin these lines with the CO two line because it's a skill set, they have of being able to construct and operate, gas transportation facilities and CO two is not terribly different. So the, the conversations that we're having with folks on the gas supply side, I would say in many of those instances, we're also having similar conversations with them about being able to provide the transportation and sequestration of the CO two as well.
So it's that dual skill set that they provide to be able to do both and it just becomes another way for them to be able to create value alongside us within some of these hubs. Does that make sense?

Noel Parks

But it does, it's really interesting is is there the potential for any of any of those to sort of, provide capital for, for those for example, for printing the lines or, or is it more of an l sort of vendor situation that they would be looking to do?

Daniel Rice

No, I think it would be more strategic with, with constructing new assets, upgrading, increasing the capacity of certain assets, and I think that's just one of the beauties of NET Power is, our plants will be able to increase new demand for natural gas in certain areas that can justify increasing the size of the gas pipeline while at the same time justifying and being able to underwrite the construction of a CO two line just given the volumes that we're talking about coming from our plants.
I mean, it's a lot of co two that we're capturing, nearly 900,000 tons for each of these plants. And so if you're talking, if we're talking about, a fleet configuration of 4 to 10 NET Power plants, you're talking about 3.5 to 9 million tons of CO two per year and, 3.5 to 9 million tons of Co two per year.
You can justify building a 200 to 500 mile pipeline, which is a really, really big pipeline. Obviously, if we do it right, we're putting, we're putting these plants right on top of the sink. We're really not going to have to build that much co two infrastructure.
But as we talk about deploying NET Power plants across the southeast of the United States where there's no great place to store the CO two, you're going to have to build a co two pipeline to be able to get that co two, either back to the Gulf Coast or to the Midwest.
And so you're going to need volume to be able to underwrite those investments. And so, NET Power is going to be one of those solutions that's going to be able to help catalyze new infrastructure to be able to decarbonize some of these areas that may not be right on top of these geologic sinks. So I think it does become very strategic and collaborative between us and the the gas infrastructure players.
They certainly want to see, increased demand for natural gas. And we can provide not only that, but we can provide another revenue line for them, which is the co two transport and sequestration on the back end of the plant. So we're really, really strategic and symbiotic sort of relationship between us and the gas infrastructure players.

Noel Parks

Thanks, great to hear. That's all I had. Thanks all.

Operator

Thank you. I'm showing no further questions at this time. I'd now like to hand the call back over to Danny Rice for any closing comments.

Daniel Rice

Okay. Thank you everybody for joining us today. We're, we're, we're busy at work. We're excited with this testing that we're starting with, with Baker right now. A lot of things coming down the pike, the open book estimate from Zachary will be coming back later this year.
So I look forward to get back with you in the beginning of next year to provide additional updates on our path towards commercialization of this. One of a kind technology that we think will be coming to market way before anything else.
So we have our heads down just focused on executing this plan, commercializing this technology and changing the world. So I appreciate your support, appreciate your participation and we will chat soon. Thank you.

Operator

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.