The Hydrogen Stream: Gazprom makes a move, Italian consortium develops solution for port areas, and more

Gazprom Neft, a unit of Russian gas and oil giant Gazprom, joined the Council of Industrial Partners of the Technological Hydrogen Valley consortium. “The company will participate in projects to develop technologies for the production, transportation, storage, and use of hydrogen, as well as the utilization of carbon dioxide. Today, Gazprom Neft already produces more than 100 thousand tons of hydrogen at its technological sites, and the plans are to reach 250 thousand tons by 2024,” reads a statement published on Tuesday. So far, Gazprom Neft has not considered hydrogen a final product, but an agent for oil refining. The company is also teaming up with the Government of Serbia to deploy carbon capture and utilization (CCU) technologies in the Balkan country. Over the last six years, the third-largest oil producer in Russia has been involved in projects for capturing carbon dioxide and injecting it into oil reservoirs to maintain reservoir pressure and increase oil recovery. “Such technologies are now being successfully applied at the Rusanda field by NIS in Serbia, a joint venture between Gazprom Neft and the Government of Serbia,” reads the note, showing how Russian oil and gas companies see hydrogen and CCU technologies as simultaneous, symbiotic developments.

Italy-based shipbuilding company Fincantieri and Enel Green Power Italia, the renewable energy unit of Italian energy company Enel, signed a Memorandum of Understanding to develop an integrated solution for the production, supply, management, and use of green hydrogen for port areas and long-range maritime transport. The deal proved once more that collaborations will be central for the hydrogen industry. “The signing of this agreement represents a further step forward in Enel Green Power’s commitment to collaborating with operators interested in developing solutions for the use of green hydrogen in sectors where electrification is not possible,” commented Carlo Zorzoli, Head of Business Development for Enel Green Power. Likewise, Fincantieri is strengthening ties with industrial partners. “The European goal of carbon neutrality by 2050 requires the creation of an industrial eco-system on which Fincantieri has been working concretely for some time through a series of operational agreements with the major Italian players for the realization of complex projects in a short time,” said Laura Luigia Martini, Executive Vice President Corporate Business Development of Fincantieri. The two companies said they would evaluate the possibility of collaborating in the supply of green hydrogen to naval, submarine, and surface vessels while also teaming up with industrial users within the port area. Enel’s Eugenio Montale power plant in La Spezia (Liguria region) will be the initial test site for the activities covered by the agreement. Last month, Fincantieri teamed up with Swiss-based shipping company MSC and gas transmission operator Snam for the “world’s first oceangoing hydrogen-powered cruise ship.” Europe’s largest utility joined forces with several companies, including Italy’s oil refining operator Saras.

According to BloombergNEF, over the last six months, the clean hydrogen industry doubled on strong infrastructure investments from the EU, UK, Canada, and China. The investments are set to continue in the short to medium term. China should account for 60-63% of global installations in 2022, capitalizing on its carbon neutrality target and related policies to stimulate clean H2 demand. CO2 prices will be central for widespread hydrogen adoption for the rest of the world, as demand still lags behind electrolyzer makers’ aggressive capacity expansion plans. These are two key messages of the outlook published by BloombergNEF on Thursday. “Nearly everything has doubled already this year in the world of clean hydrogen, and we expect the momentum to continue in the months ahead… Electricity generators have almost doubled their planned hydrogen-fired turbine capacity since January,” commented Martin Tengler, lead hydrogen analyst at BloombergNEF. The 2H 2021 Hydrogen Market Outlook reports that more than 40 countries have now published a hydrogen strategy or are developing one, but China remains the most promising country. “What’s happening in China right now is revolutionary for clean hydrogen. Chinese companies are racing to show their compliance with the country’s carbon neutrality target, pushing the market for electrolyzers… to be at least nine times bigger in 2022 than in 2020.” Despite weakness on the demand side, electrolyzer shipments are forecasted to double in 2021 and quadruple in 2022. A total of 16GW of manufacturing capacity could come online by 2024, benefitting from the growing government funding.

Iceland’s geothermal power company HS Orka and UK-based Hydrogen Ventures Limited (H2V) announced plans to develop a production plant for green methanol using green hydrogen to power the marine sector, as well as domestic and commercial vehicles such as cars, vans, and lorries. “Iceland has set itself ambitious targets for reducing its carbon emissions and we believe harnessing the power of hydrogen is crucial in achieving them. With its history of utilizing renewable energy, Iceland is leading the way,” commented H2V’s Chief Executive Officer Horacio Carvalho. The project will comprise two phases, with an initial 30MW input, followed by a second phase at a much larger scale. “The total cost of Phase One is anticipated to be €100m.” HS Orka will supply electricity, fresh water and natural carbon dioxide.

UK-based oil and energy company BP agreed on Memoranda of Understanding (MoUs) with potential customers for its proposed clean hydrogen production facility in Teesside in northeast England. New clients include ammonia producer CF Fertilisers, chemical company Mitsubishi Chemical and infrastructure company Sembcorp Energy UK. “These companies are seeking to decarbonize existing operations in Teesside by switching fuel from natural gas to clean hydrogen,” reads the note released on Thursday. BP is also teaming up with Saudi Arabia’s Alfanar to scope the supply of clean hydrogen to Alfanar’s waste-to-sustainable aviation fuel (SAF) plant, currently under development in Teesside. “Today’s announcement demonstrates the diverse range of companies and industries that can benefit from clean hydrogen,” commented Louise Jacobsen Plutt, BP’s senior vice president of hydrogen and CCUS. BP’s H2Teesside facility aims to produce up to 1GW of blue hydrogen, 20% of the UK’s hydrogen target by 2030.

The government of Colombia published its hydrogen roadmap, launching on Wednesday a 12-day consultation. “Industrial demand will be the first to develop, motivated by the decarbonization of processes that currently consume hydrogen in Colombia: fuel refining and fertilizer production. On the other hand, demand from the transport sector should start from 2026, mainly in heavy land transport (buses and trucks),” reads the document in the chapters on the demand side. The South American country also set a hydrogen target in the industrial sector. “Consumption of 40% low-emission hydrogen in the industrial sector with respect to the total hydrogen consumed in the sector, considering both the consumption of hydrogen as a raw material and its use as an energy source.” The 49-page Colombian strategy suggests that blue and green hydrogen will play a vital role in 2030-2040. “Starting in 2035, blue H2 (from coal gasification or NG reforming) would be even more competitive than gray H2 due to rising CO2 prices and lower costs of capture technologies,” reads the document. Things will change in 2040, as green hydrogen is expected to “become the most competitive alternative throughout the Colombian territory.”