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Australia's Woodside Energy has proposed its first overseas
clean hydrogen plant as the natural gas producer seeks to add
low-carbon products to its business mix.
Woodside, which is planning to spend $5 billion on
decarbonization activities by 2030, announced 7 December its third
project in the space this quarter to underscore its climate
ambitions.
The ASX-listed company said it had secured a lease and purchase
option for 38 hectares of vacant land to develop the H2OK facility
at the Westport Industrial Park in Ardmore, Oklahoma, targeting the
heavy transportation sector.
Initially, the plant will produce up to 90 metric tons (mt) of
hydrogen per day based on a 290-MW electrolysis capacity. Woodside
said the location allows the plant to expand its production to 180
mt per day with a 550-MW electrolysis capacity.
"With H2OK we will be bringing Woodside's extensive liquefaction
experience from LNG to deliver large-scale hydrogen production,"
Woodside CEO Meg O'Neill said in a statement.
"H2OK would be located in a highly prospective part of the US
market, close to national highways and the supply chain
infrastructure of major companies that have signaled their interest
in securing reliable, affordable, and lower carbon energy," she
added.
Woodside plans to source power for the project from Oklahoma's
existing grid, a large portion of which is wind powered, and
acquire Renewable Energy Certificates to abate any remaining
emissions.
Wind power accounted for more than one-third of the state's net
electricity generation of 82.3 million TWh in 2020, according to
the US Energy Information Administration. Overall, 40% of
Oklahoma's electricity came from renewable sources last year.
Woodside has completed the preliminary design for the modular,
scalable production facility for H2OK and may issue tenders for
front-end engineering design before the end of this year. The
project is due for a final investment decision (FID) in the second
half of 2022 and would begin production in 2025.
The facility will aim to meet hydrogen demand from heavy-duty
trucks and equipment, warehouse forklifts, ground-handling
equipment, and fuel-cell microgrids for warehouses and data
centers, according to Woodside.
US demand
Separately, Woodside signed a memorandum of understanding with
Nasdaq-listed Hyzon Motors to develop zero-carbon hydrogen supply
for medium- and heavy-duty commercial vehicles in Australia and the
US.
The two companies will explore opportunities to build green
hydrogen production facilities and supply infrastructure. Hyzon,
which makes fuel cell-powered trucks, could use the hydrogen to
supply its customers.
Parker Meeks, chief strategy officer of Hyzon, a spinoff from
Singapore's Horizon Fuel Cell Technologies, suggested the
partnership could potentially help his company reduce
infrastructure development costs for long-range trucks.
"This is particularly relevant for the Australian market, where
freight corridors face especially long distances between refueling,
as well as for coast-to-coast trucking in the US," Meeks said in a statement 7 December.
Some industry players—including Trafigura—believe trucks
will provide the best entry point in the embryonic marketplaces for
clean hydrogen. Fuel-cell trucks are already up-and-running in the
market, and the infrastructure costs for refueling them are
relatively low compared with other hard-to-abate sectors like
steelmaking.
"I expect the fuel cell electric truck market to grow rapidly as
there is increasing pressure to reduce the tailpipe emissions of
freight movement," said Tim Sasseen, board president of the United
States Hydrogen Alliance trade group.
"Fuel cell electric trucks are the only zero-emission option
that can replace a diesel truck in terms of distance and
performance," he told Net-Zero Business Daily.
As part of the US infrastructure bill signed into law last
month, the federal government will provide $2.5 billion in grants to
public entities to deploy low-carbon transportation projects
including hydrogen fueling infrastructure.
"We expect significant infrastructure funding from the federal
government, which will be administered to infrastructure projects
through state agencies and metropolitan planning organizations,"
Sasseen said.
If the US is to reach carbon neutrality, IHS Markit estimates
20% of the light-duty vehicle fleet, 40% of medium- and heavy-duty
trucks, and 50% of transit buses will be powered by hydrogen by
2050. This translates to 27 million mt/year of demand.
"We expect to see large-scale hydrogen production
internationally by 2030, and Woodside intends to play a role in
this emerging global industry," Woodside Executive Vice-President
for Sustainability Shaun Gregory said. "Our collaboration with
Hyzon supports Woodside's strategy to develop lower-carbon energy
products and services alongside our existing portfolio of energy
assets."
Decarbonization roadmap
Woodside, one of the world's largest LNG suppliers, has
committed to net-zero GHG emissions from its operations by 2050. In
the interim, the Perth-based company aims to cut its emissions by
15% before 2025 and by 30% before 2030, relative to the average
level between 2016 and 2020.
Woodside has stated it plans to meet the
goals via operational efficiency enhancements, carbon offsets,
carbon capture and storage (CCS), and blue and green hydrogen
development.
In an investor update 8 December,
O'Neill said the company plans to invest $5 billion in new energy
products and low-carbon services—including sequestering
emissions from potential CCS projects for third parties—by
2030.
"This significant investment…will position Woodside as an early
mover in the new energy market and support the decarbonization
goals of our customers," she said, added: "We have a growing
portfolio of new energy opportunities with line of sight to
producing hydrogen, ammonia, and renewable power this decade."
Woodside has been mulling over plans to build a 5-MW AI-enabled
solar power facility in
California, the US and two 50-MW solar plants near Karratha,
Western Australia.
In October, the company unveiled a hydrogen project in
southern metropolitan Perth, Western Australia, where the proposed
capital expenditure exceeds A$1 billion ($711 million).
Based on Woodside's proposal, the plant will initially produce
300 mt of hydrogen per day from a 35-MW electrolyzer and natural
gas reforming. It can scale up to 1,500 mt per day.
Subject to an FID, the company plans to begin construction in
2024 and export the hydrogen in the form of ammonia or liquid
hydrogen beginning in the second half of this decade.
However, the project's environmental credentials were questioned
by some observers, including former Australian Prime Minister Malcolm Turnbull. Woodside did
not announce any CCS or renewable expansion projects along with the
hydrogen plan and only said it will offset emissions by carbon
offsets.
In November, Woodside proposed a 300-MW electrolyzer in Bell
Bay, Tasmania, the Australian island state, which will be fully
powered by renewable energy.
The plant's hydrogen output could be converted into 200,000 mt
of ammonia per year for exports to Asia and Europe or for domestic
use, according to the company. The production can be expanded as
Woodside will have the capacity to scale the electrolyzer up to 1.7
GW.
An FID is due in 2023, with construction and commissioning
expected to take approximately 24 months.
Woodside announced the hydrogen projects as it decided to go
ahead with the BHP Petroleum merger and the
$12-billion Scarborough-Pluto LNG project.
The merged entity is expected to emit over 6 million mt of CO2
equivalent per year, increasing Woodside's operational emissions by
more than 75%, according to IHS Markit estimates. Nonprofit Climate
Analytics said direct and indirect emissions from the LNG facility
will amount to 1.37 billion CO2e in its expected lifespan.
IHS Markit Principal Research Analyst Jason Keely said
Woodside's recent interest in hydrogen and ammonia projects was
part of its evolving strategy to meet long-term decarbonization
goals. "Woodside plans to grow oil and gas production over the next
several years, so it will need to offset baseline and growth
emissions—a difficult task," he said.
Keely suggested that the projects would make strategic sense as
Woodside is already handling gaseous products as an exploration and
production company, especially for blue hydrogen produced from gas
reforming with CCS.
"The company's knowledge of the infrastructure picture in
Western Australia, where its operations are currently focused, may
give it a competitive advantage if it green lights a project
there," he added.
--Adds CEO's comments on the company's low-carbon investment
plans from an 8 December investor update.
Posted 08 December 2021 by Max Tingyao Lin, Principal Journalist, Climate and Sustainability
RT @SPGlobal: Many nations have set #NetZero Emissions by 2050 as their climate goal. Will be enough minerals to meet the requirements? Joi…
Jul 11
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