Naftogaz Ukrayiny, RWE to explore Ukraine hydrogen project potential

Naftogaz Ukrayiny and Germany's RWE Supply & Trading are to study joint hydrogen production and storage projects in Ukraine, the companies said Aug. 22.

The projects could form part of Germany's H2Global initiative to support imports of renewable hydrogen from outside the EU. Naftogaz and RWE have also agreed to focus on jointly selling hydrogen to other markets in the EU.

"The companies agreed to analyze the possibilities of mutually beneficial cooperation in creating a complete value chain for "green" hydrogen and its derivatives, such as ammonia, produced in Ukraine," Naftogaz said in a statement.

The agreement was signed during German Chancellor Angela Merkel's visit to Kyiv for talks over energy and security issues with Ukrainian President Volodymyr Zelensky.

"In addition, Naftogaz and RWE agreed to cooperate in exploring commercial opportunities for the sale of Ukrainian green hydrogen in European markets, focusing on the main markets of RWE," it said.

Naftogaz CEO Yuriy Vitrenko said the long-standing partnership between the Ukrainian company and RWE in natural gas trading would help both companies cooperate in the hydrogen sector.

"We consider green hydrogen to be our strategic priority, and we are happy to work on this together with RWE," Vitrenko said.

RWE Supply and Trading board member Ulf Kerstin said hydrogen would play a key role in decarbonizing industry, "as not everything can be electrified with renewable energy. As an industry partner, RWE is part of this solution."

Ukraine has been exploring the use of nuclear power in electrolysis, as well as the use of its existing natural gas pipeline network for hydrogen transportation.

Energy ministry officials discussed potential hydrogen projects with Thyssenkrupp and Siemens in 2019 as part of the EU's Hydrogen Strategy for a Climate-Neutral Europe.

European renewable hydrogen (Dutch, PEM electrolysis including capex) was assessed by S&P Global Platts at Eur7.08/kg Aug. 20. The comparable blue hydrogen price (SMR with CCS, including capex and carbon) was assessed at Eur3.12/kg.