London — Neptune Energy is progressing its PosHYdon offshore green hydrogen pilot project in the Dutch North Sea and its DelpHYnus blue hydrogen project in the UK, the company said May 13 in a results statement.
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The independent oil and gas company expects to finalize the consortium agreement for the 1 MW PosHYdon Dutch offshore electrolyzer project in the second quarter and start a topside feasibility study.
In the UK, Neptune Energy has applied to the Oil and Gas Authority for a CO2 appraisal and storage license in the southern North Sea near its Cygnus gas production hub for its proposed DelpHYnus blue hydrogen and carbon capture and storage project.
"The proposed DelpHYnus development provides a CO2 transport and storage solution for the South Humber industrial area, together with production facilities for low carbon hydrogen using natural gas from the grid," Neptune Energy said.
"Neptune has proposed an ambitious work program for the appraisal phase of the project and is in discussions with potential partners for the hydrogen plant," it said.
The OGA is expected to make a decision on awarding the storage license within six months. The application is separate to the UK CCS cluster selection process run by the UK Department for Business, Energy and Industrial Strategy.
The DelpHYnus project will provide CO2 transportation and storage for the South Humber industrial area, along with low-carbon hydrogen production facilities at the former Theddlethorpe Gas Terminal, using natural gas from the grid as a feedstock.
Neptune said it has engaged with CO2 emitters and hydrogen buyers in the South Humber industrial area, and was confident in the demand landscape for CO2 storage and low-carbon hydrogen. The company is also in discussions with industrial gas producers to partner on the proposed blue hydrogen plant. The company next plans to develop an end-to-end value chain consortium.
Platts assessed the cost of producing hydrogen by autothermal reforming in the UK at GBP1.72/kg ($2.41/kg) on May 12, including capex and carbon.
Offshore green hydrogen
Neptune Energy's PosHYdon aims to integrate three energy systems in the North Sea: offshore wind, offshore gas and offshore hydrogen, with the electrolyzer turning demineralized sea water and electricity into hydrogen.
"The aim of the pilot is to gain experience of integrating working energy systems at sea and the production of hydrogen in an offshore environment," Neptune Energy said on its website.
Dutch utility Eneco, gas system operator Gasunie, Noordgastransport and NOGAT are all involved in the PosHYdon offshore Netherlands project, initiated by decommissioning body Nexstep and scientific research body TNO.
Platts assessed the cost of producing hydrogen via alkaline electrolysis in the Netherlands (including capex) at Eur4.24/kg May 12. PEM electrolysis production was assessed at Eur5.34/kg, while blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was Eur2.23/kg.
Neptune Energy is also carrying out a feasibility study for its L10 CCS project to potentially store up to 120 million-150 million mt of CO2 for third-party industrial customers. The feasibility study is due to be completed in mid-2021, it said in its first-quarter results.
Neptune said in December the study would assess the feasibility of injecting 5 million-8 million mt/year of CO2 into the depleted gas fields around the Neptune-operated L10-A, L10-B and L10-E areas.
"If the project is developed, it will be one of the largest CCS facilities in the Dutch North Sea and could meet more than 50% of the CO2 reduction being targeted by the Dutch industrial sector," Neptune said at the time.