Nel ASA's $20 Million Submarine Pipeline Locks In Connecticut Output Through 2028

Nel Hydrogen US has booked about $20 million in Collins Aerospace PEM electrolyser orders for submarine fleets, with delivery set for 2027 and 2028.

Nel ASA's military niche is quietly becoming one of its most dependable revenue streams. The Norwegian hydrogen group's US arm, Nel Hydrogen US, has stacked up a series of orders from Collins Aerospace for PEM electrolyser stacks destined for submarine fleets, and the combined tally now stands at roughly $20 million.

The most recent slice — about $7 million — arrived on top of a $12 million agreement unveiled a day earlier for the US Navy. Smaller deals booked in September round out the total. The hardware is earmarked for undersea programmes across three navies: the United States, the United Kingdom and France. On board, the stacks handle oxygen generation and life-support duties for the crews.

Connecticut Stays at the Core

All of the units will be built at Nel's facility in Wallingford, Connecticut, where the company concentrates its stack manufacturing know-how. Delivery is scheduled for 2027 and 2028, meaning the revenue lands well after the orders are logged.

That timing gap is central to how the business is being valued. The entire $20 million block will be recognised as order intake in the third quarter of 2026, yet not a cent of it hits the top line before the end of the decade. Collins Aerospace had already placed a $6 million order with the Norwegians back in March 2025, making the latest tranches an extension of an established relationship rather than a one-off win.

PEM technology has become the engine of Nel's order book. In the second quarter of 2026, PEM systems accounted for about 96 percent of total order intake, which stood at NOK 230 million at the time. The defence work now underpins factory loading in Connecticut for several years to come.

A European Assembly Layer Takes Shape

While the submarine contracts run their course, management is reworking how it serves industrial customers closer to home. Roughly three weeks ago, Nel signed a framework agreement with Hydrasun aimed at building dedicated assembly and system integration capacity in Europe. The arrangement centres on the MC-series PEM electrolyser platform, splitting the production chain between US stack manufacturing and European finishing.

The logic is straightforward: keep the high-value cell work in Wallingford, and let a partner handle the labour-intensive integration nearer to continental buyers.

Market Response Stays Muted

Investors have yet to be convinced. The shares changed hands at EUR 0.1940 on the day of the latest disclosure, a gain of 1.0 percent, and closed the prior session at EUR 0.1938. Even with the fresh defence orders in hand, the stock sits about 47 percent below its 52-week high of EUR 0.3655, a level touched in May.

The wariness traces back to the long stretch between signing and shipping. With major contracts not converting into revenue until 2027 and 2028, near-term earnings get no lift from the announcements. What Nel must now deliver is execution — standing up the European assembly network on schedule and working through its backlog without slippage. The long-dated supply agreements do give the company a more predictable base load reaching deep into 2028, but the market is waiting to see the cash follow the paperwork.