Woodside Energy has partnered with Japanese firms Japan Suiso Energy, Ltd, and The Kansai Electric Power Co., Inc. (KEPCO) to develop a liquid hydrogen supply chain between Australia and Japan, the Australian oil and gas major said on Thursday.
Under a memorandum of understanding (MOU) the companies have signed, the parties will look to create a supply chain in which liquid hydrogen, produced at Woodside’s proposed H2Perth Project in Western Australia, would be shipped in liquid hydrogen carriers to receiving terminals in Japan.
Woodside plans the H2Perth Project in the Rockingham and Kwinana Industrial Zones in Perth, Western Australia. The facility is intended to produce liquid hydrogen via natural gas reforming, with the intention of achieving net zero Scope 1 and 2 greenhouse gas emissions from the start of operations, thanks to carbon capture and storage (CCS).
However, the CCS project is subject to further technical assessments and securing all necessary commercial arrangements and regulatory approvals, Woodside said.
The project will use natural gas with CCS to be carbon neutral at the production stage, in a sign that international majors believe gas plus carbon capture is a viable path to hydrogen production.
Green hydrogen, however, has suffered setbacks in recent years.
The green hydrogen drive is losing momentum as start-ups face rising costs and uncertain demand, while energy majors back out of multi-billion-dollar projects as they return to their core oil and gas business.
Despite the promises of zero emissions in green hydrogen use and the environmentally-friendly way of producing green hydrogen, the market has faced up to the fact that the low-carbon type of hydrogen made from renewables remains very expensive and needs a lot of subsidies, incentives, and government support to exist.
Rising costs and an uncertain regulatory and demand picture have made low-emission hydrogen projects more challenging, and clean hydrogen production by 2030 could be a quarter lower than expected at this time last year, the International Energy Agency (IEA) said in its annual Global Hydrogen Review earlier this month.
By Tsvetana Paraskova for Oilprice.com
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