Southern Oil will install the unit, expected to be between 200kW and 400kW in capacity, at its advanced biomass facility at Gladstone.
Details remain to be finalised though AFC Energy plans to sell the balance of plant for its hydrogen generation unit to Southern Oil and lease the system's stack and electrodes for an undisclosed sum.
Northern Oil, a subsidiary of Southern Oil, is building a large industrial scale pilot plant where surplus hydrogen generated from the system is to be made available for consumption within a fuel cell.
Hydrogen produced from the Gladstone refinery is expected to generate power at a lower cost than its existing grid tariff.
AFC will deliver the project in the first half of 2019.
Adam Bond, AFC’s chief executive, said: “ The order received for the Company's fuel cell system reflects the first stages of a growing pipeline of commercial fuel cell projects in country and validates the opportunities we believe to be emerging in the Australian hydrogen market.”
Tim Ross, Southern Oil’s CEO, added: “In developing the Gladstone Advanced Biofuels Pilot Plant over the last three years, Southern Oil, has benchmarked cutting-edge renewable technologies from around the world. In my mind, AFC Energy's Alkaline Fuel Cell has great potential."
AFC and Southern Oil originally agreed to collaborate on how to integrate AFC Energy’s fuel cells into a commercial power system last year.