Equinor progresses UK blue hydrogen plant project with pre-FEED contracts

Equinor has awarded pre-front end engineering and design contracts for its planned H2H Saltend 600-MW low-carbon hydrogen production plant in the UK to three companies, it said Nov. 2.

The contractors will provide design proposals for the proposed plant, which will produce hydrogen from natural gas in conjunction with carbon capture and storage technology to reduce CO2 emissions, the company said in a statement.

Equinor plans to select one of the consortiums at the end of 2022 for the final stage of FEED engineering, before making a final investment decision in the later part of 2023.

"Producing hydrogen from natural gas with carbon capture and storage provides a practical, scalable solution to decarbonize a wide range of sectors that currently depend on fossil fuel," Equinor Vice President for UK Low Carbon Solutions Dan Sadler said in the statement.

The three contractors are KBR and Tecnimont consortium, Technip Energies consortium and Linde, through its businesses at Linde Engineering and BOC UK.

Equinor plans to build a further 1.2 GW of low-carbon hydrogen production, which will largely be used to fuel the Keadby hydrogen power station, which it is developing with utility SSE Thermal.

Hydrogen production from H2H Saltend, in the UK's northeast, will enable fuel switching in the Humber region from 2026-27, reducing CO2 emissions by 1.1 million mt/year, Equinor said.

The Keadby power station is expected to start up in 2028-29, reducing CO2 emissions by around 2 million mt/year.

The combined 1.8 GW of hydrogen production capacity is over a third of the UK's 5 GW capacity target by 2030.

In October, the UK government selected the East Coast Cluster, which the Humber project feeds into, as one of the country's first two industrial decarbonization clusters. This opens the way for government funding for the region's CCS project, with the aim of starting operations by the mid-2020s.

HyNet, in the UK's northwest, also received backing from the government.

Calculated costs for blue hydrogen production from natural gas with carbon capture and storage are currently lower than for green hydrogen, produced by electrolysis of water powered by renewables.

But electrolyzer costs are falling rapidly, with expectations that costs could be competitive with blue hydrogen in some locations this decade.

S&P Global Platts assessed the cost of producing hydrogen by autothermal reforming with carbon capture and storage at GBP3.83/kg ($5.22kg) on Nov. 1, including capex and carbon.

Hydrogen production via alkaline electrolysis in the UK (including capex) was assessed at GBP10.45/kg.