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Fortescue, TES partner for 300,000 mt green hydrogen supply to Europe

Highlights

FID targeted for 2023, first deliveries from 2026

Hydrogen to be shipped as synthetic methane

CO2 captured in Germany, returned for reuse

  • Author
  • James Burgess    Ruchira Singh
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  • Ankit Rathore
  • Commodity
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  • Energy Transition Environment and Sustainability Hydrogen: Beyond the Hype

Fortescue Future Industries and Tree Energy Solutions have partnered to supply 300,000 mt of renewable hydrogen to Europe, with a final investment decision targeted for 2023, the companies said in a joint statement Oct. 5.

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The companies said they would jointly develop industrial-scale green hydrogen production globally, with an initial focus on Australia, Europe, the Middle East and Africa, although they did not name specific production projects for the plan.

Platts' Hydrogen Price Wall shows the world's cheapest electrolysis-based hydrogen as assessed by S&P Global Commodity Insights derives from Western Australia, the US, and the Middle East. The cost of producing hydrogen by alkaline electrolysis in Western Australia averaged $3.15/kg in August, compared with $25.35/kg in the Netherlands, based on month-ahead grid power prices.

The hydrogen would be converted to synthetic methane and shipped to the planned TES import terminal in Wilhelmshaven, Germany, which is gearing up to receive its first deliveries in 2026, the companies said.

"This agreement is another steppingstone in building TES as one of the leading hydrogen players in the world to accelerate the energy transition with the most cost-effective, bankable and scalable green alternative to today's fossil fuels," TES CEO Marco Alvera said in the statement.

Under the agreement, FFI is to take a Eur30 million ($29.8 million) share in TES and invest Eur100 million in the construction of the Wilhelmshaven terminal.

TES is to develop and manage Germany's fifth LNG floating storage and regasification unit in Wilhelmshaven, the company said at the start of September, having been selected by the German Ministry of Economics and Climate Protection for the project.

The new FSRU project will be managed by TES in partnership with two other global players -- E.ON and France's Engie -- and is to begin operations by the start of the heating season in 2023, TES said in a statement Sept. 1.

Engie will be responsible for the five-year charter of the FSRU on behalf of the German economy ministry and for part of the LNG supply into the terminal, while TES will manage the development and operation of the FSRU.

The green hydrogen import project will see the energy carrier shipped in the form of methane, with CO2 then captured in Germany and transported back to the supply location for reuse in a "circular, closed-loop, zero-carbon system" the companies said.

The agreement announced Oct. 5 contributes toward FFI's deal with E.ON to supply 5 million mt of green hydrogen to Germany from the mid-2020s, FFI CEO Mark Hutchinson said in the statement.

In the lead-up to Egypt hosting the 2022 UN Climate Change Conference (COP27), FFI's founder and Executive Chairman Andrew Forrest met Egyptian president Abdel Fattah El-Sisi to discuss the development of renewable energy projects in the Middle East, the company said in September. This follows a memorandum of understanding signed earlier to conduct studies to develop renewable hydrogen production in Egypt.

Synthetic methane

TES' Wilhelmshaven terminal plan comprises six ship berths and 2 million cu m of onshore storage capacity using 10 on-site tanks, with six available during the first stage.

The terminal will offer access to the gas network, including salt caverns at Etzel and proximity to Groningen's gas grid infrastructure.

TES will then build carbon export facilities at the site, which will be connected to the CO2 transport network of the German gas grid operator.

The carbon would be exported abroad and combined with solar-based renewable hydrogen to make synthetic methane, for shipping back to Europe.

Australia's hydrogen plans

Australia has around 115 hydrogen projects in various stages of maturity, with a total production capacity projected at 9.5 million mt/year, according to the S&P Global Hydrogen Production Assets database.

About 13 projects are already operating, including the Hydrogen Park SA in Adelaide where hydrogen is being blended into the gas grids. This also comprises the Hydrogen Energy Supply Chain in Victoria which shipped the first liquid hydrogen to Japan in February.

FFI has a hydrogen project in Gibson Island in Queensland to produce 50,000 mt/year of renewable hydrogen for conversion to renewable ammonia, the database shows.

The company also has the Fortescue Green Hydrogen and Ammonia Plant project in Bell Bay in Tasmania, slated to produce 40,409 mt/year.

FFI said in December 2021 that it has completed initial studies with partner Incitec Pivot to convert the Gibson Island ammonia-production facility to run on renewable hydrogen instead of fossil fuel gas. Renewable hydrogen and ammonia from the project could also provide low-carbon fuel supply to the Port of Brisbane, Brisbane airport, and other heavy transport users, it said.