BP to take stake in Australian hydrogen project

BP is preparing to take a stake in one of Australia's most ambitious hydrogen export and renewable energy projects, the Asian Renewable Energy Hub (AREH) in Western Australia (WA), according to sources close to the company.

The AREH plans to export 10mn t/yr of green ammonia that will tap on electricity from the 26,000 MW of wind and solar energy the project plans to install. BP did not comment on reports that it is about to take a 30pc stake in the project, which has been initially estimated to cost A$36bn ($25bn) to build the 16,000MW of onshore wind and 10,000MW of solar photovoltaic (PV) for hydrogen and ammonia production.

Around 3,000MW of the installed capacity would be used for large energy consumers in the Pilbara region of northwest WA, where Australia's largest iron ore mines are located. AREH is looking to make a final investment decision (FID) on the project in 2025.

BP has set some of the most ambitious targets among the international oil companies, with an aim to reduce scope one and two greenhouse gas (GHG) emissions by 50pc by 2030. It is also targeting to reach-net zero emissions by 2050, including lifecycle emissions from the products it sells.

BP's hydrogen ambitions in Australia to date have been its feasibility study into the production of hydrogen from renewable sources at its former 146,000 b/d Kwinana refinery, south of Perth in WA, that was closed last year, as well as further work on developing a pilot plant, located near the WA port of Geraldton, to produce 4,000 t/yr of hydrogen and up to 20,000 t/yr of ammonia.

The existing shareholders in AREH are Danish wind turbine manufacturer Vestas, Australian private-sector energy firm CWP Renewables, and Hong Kong-based energy firm InterContinental Energy.

By Kevin Morrison