BP, Macquarie see a green future for shuttered Australian oil refinery
British energy giant BP and Macquarie Capital are assessing plans to transform the former site of Australia’s largest oil refinery into a clean-energy hub that could produce and distribute zero-emissions fuels including “green” hydrogen.
Nearly 12 months after announcing the closure of Perth’s 65-year-old Kwinana oil refinery saying it was no longer economically viable, BP has detailed plans to conduct a feasibility study to consider repurposing the site for manufacturing hydrogen.
The study would be conducted in partnership with Macquarie and partly funded by the WA state government, BP said.
“BP is committed to developing solutions that will help accelerate the energy transition in Australia,” BP Australia president Frédéric Baudry said.
“With our unique capabilities, BP can offer increasingly complex, multi-energy solutions to its partners and customers through their decarbonisation journey.”
Hydrogen, which burns cleanly and emits only water, is touted as an important growth technology as the transition to cleaner energy gathers pace due to its potential to decarbonise parts of the economy that cannot be easily electrified, such as a range of industrial processes and heavy transport.
Most of today’s hydrogen is limited to “grey hydrogen”, made from coal or gas via a process that emits carbon dioxide into the atmosphere. Green hydrogen, on the other hand, is produced when a renewable energy-powered electrolyser is used to split water into hydrogen and oxygen.
John Pickhaver, co-head of Macquarie Capital Australia and New Zealand, said the company believed the Kwinana precinct could support a “meaningful green hydrogen industry”.
“We are looking forward to working with BP and the Western Australian Government on this significant project,” he said.
WA premier Mark McGowan said hydrogen produced at Kwinana could one day be exported around the world as more countries set targets and ramp up efforts to achieve carbon neutrality.
“Countries like Korea, Japan, China, are going to need renewable energy as a carbon-free fuel source into the future,” he said. “Western Australia is ideally placed to provide it.”
Hydrogen projects are being funded and explored by governments globally amid efforts to meet their carbon-reduction goals.
It is also being embraced by oil and gas producers as a possible lifeline through which they can diversify and remain relevant in a world increasingly legislating against carbon emissions.
The Morrison government is planning for Australia to become a leading global hydrogen exporter by 2030 after securing approval of state and federal ministers for a $370 million Clean Energy Finance Corporation fund for new hydrogen projects.
However, significant barriers to green hydrogen’s future as an energy source remain, the biggest being the prohibitively high cost of the technology to produce it compared with hydrogen made from fossil fuels.
Extracted from The Sydney Morning Herald