Woodside to build $1b hydrogen plant in WA
Woodside Petroleum’s biggest hydrogen investment in Australia to date, a $1 billion plant south of Perth, will expand gradually to meet demand from customers in Asia, chief executive Meg O’Neill said.
“We can scale over time and invest as customer demand grows,” Ms O’Neill told The Australian Financial Review after revealing plans to build the new plant, named H2Perth, that aims to make up to 1500 tonnes of hydrogen every day to export in the form of ammonia and liquid hydrogen.
The project is designed to be built in small blocks and will mostly produce hydrogen for export. Woodside is also talking to potential domestic customers. “We think one of the first things that we build on the site will be a local hydrogen refuelling station,” Ms O’Neill said.
“Liquid hydrogen for ground transportation is going to be one of the breakthrough areas for this energy source,” she said. “So we want to make sure that we’ve got the ability to refuel those vehicles as either private industry or the government invests in those technologies.”
Trucks and buses are expected to shift to hydrogen fuel cells, which last longer than lithium ion batteries over big distances, as well as some cars.
The refuelling stations proposed by Woodside could be providing hydrogen by 2023.
The company also hopes to feed energy from the hydrogen plant into WA’s electricity grid.
While Woodside’s LNG projects were “part of the solution” to help some countries reduce their dependence on coal, the company recognised that it needed to be pursuing energy projects that had lower carbon emissions, Ms O’Neill said. “Climate change is one of the most serious issues facing the world today.”
The company is already working with Countrywide Renewable Energy to build a pilot renewable hydrogen plant named H2TAS at Bell Bay in Tasmania, which Ms O’Neill claims is the “natural cradle” of Australia’s hydrogen industry due to its hydropower resources.
But WA’s solar and wind resources meant the state was also a good place to invest in hydrogen projects, she said.
The Kwinana plant comes as the race to produce hydrogen in commercial quantities to wean the nation off natural gas intensifies.
WA iron ore billionaire Andrew Forrest this month committed Fortescue Future Industries – the clean energy arm of his Fortescue Metals Group – to build the first stage of a large hydrogen electrolyser factory in Gladstone in Central Queensland. His privately owned Squadron Energy has received a $30 million federal grant towards a proposed Port Kembla power station, which will shift completely to green hydrogen by 2030.
The WA government said the project, which Woodside will fully fund, would cost about $1 billion. Ms O’Neill declined to comment on how exactly the new plant was being funded.
Woodside, which is expanding through the acquisition of BHP’s petroleum business and is under pressure to reduce its carbon emissions, has been trying to get a foothold in the emerging hydrogen market in Asia and has been considering various options.
Ms O’Neill has previously said that the deal with BHP gives Woodside a bigger balance sheet to invest in renewable energy projects.
The new hydrogen plant will be built on about 130 hectares of industrial land leased from the WA government in the Kwinana industrial zone south of Perth, which is close to the Port of Fremantle and a hub for the state’s electricity network. Construction is expected to start in 2024.
The government says it wants to make hydrogen more affordable to help the state reach net zero emissions by 2050.
WA Trade Minister Roger Cook said the hydrogen project would help diversify the state’s economy. WA is reviewing about 30 hydrogen project proposals.
H2Perth will produce hydrogen and ammonia using electrolysis technologies and natural gas reforming, and will abate or offset all carbon emissions.
The electrolysis component of H2Perth’s production will have an initial capacity of 250 megawatts, with potential to expand to more than 3 gigawatts.
Woodside and the APA Group ditched a previous WA renewable hydrogen project in May after failing to win government support.
Woodside’s shares rose 3.7 per cent to trade at $24.13 on Monday afternoon. The stock is up 31 per cent over the past 12 months.
Extracted from AFR