BP moves forward with WA Green Hydrogen despite ‘high complexity’

BP pushes ahead with WA green hydrogen despite ‘high complexity’

BP will aggressively pursue Pilbara miners to buy its green hydrogen before exporting it, as the major British oil and gas company launches the $36 billion ($56 billion) green hydrogen project in Western Australia.

BP bought a 40.5% share of the Asian Renewable Energy Hub in June. If fully developed, the hub would cover 6,500 square kilometers of northwest Western Australia with more than 1,700 wind turbines – up to 290 meters high – and 18 large-scale solar farms.

BP chief financial officer Murray Auchincloss said he expects power to start flowing out of the hub between 2025 and 2027.

Murray AuchinclosBP’s chief financial officer told investment analysts this week:

First of all, it’s a domestic game.

“Can we bring green hydrogen or green energy to nearby mining and other industries? »

BP’s move to drive out domestic customers is the third attempt by stakeholders to generate revenue from 26 gigawatts of solar and wind power, planned for a remote location even by North West WA standards.

Since the hub’s conception, demand for clean energy has emerged in the Pilbara with Fortescue aiming to be emissions-free by 2030 and fellow iron ore miners Rio Tinto and BHP predicting substantial emissions reductions.

The Asian Renewable Energy Hub takes its name from a plan to use undersea cables to sell electricity to Java, Indonesia’s most populous island. The idea died due to a lack of customers with the financial strength to back the project with strong long-term power purchase agreements.

In 2020, the project developers switched to using emission-free energy to separate hydrogen from water using electrolyzers, then adding nitrogen to produce ammonia. more easily transported for export.

The expansion from 15 GW to 26 GW and the addition of an export port was rejected in 2021 by Coalition Environment Minister Sussan Ley as “clearly unacceptable” because the port could affect a wetland bird habitat on Eighty Mile Beach protected by international agreements.

BP has environmental approval from the WA government to generate the 15GW planned for Java – the equivalent of 12 of Victoria’s Loy Yang B coal-fired power stations – but would need approval to build a 250km transmission line long to Port Hedland to access mining customers.

BP’s announced timetable for 2025 is ambitious given delays in environmental approvals and a tight labor market in WA. The company’s hopes of exporting ammonia by the end of the decade pose an even tougher challenge.

“The complexity of the international game is quite high,” Auchincloss said, citing the need to lock in customers and secure “a pretty serious capacity for electrolysers.”

A BP spokesperson said it was considering options for the location of the port and ammonia facilities based on project effectiveness and input from stakeholders, including all three levels of government and owners traditional lands, the Nyangumarta people.

A power line to Port Hedland to access initial electricity customers could later be extended to supply a hydrogen and ammonia plant in Port Hedland, avoiding the difficulty of building and operating a complex facility in one location. remote and the need for a new port near the protected wetland.

BP pushes ahead with WA green hydrogen despite ‘high complexity’, November 2, 2022

Sharon D. Cole