UK's BP will acquire a 40.5% stake in the 26 GW Asian Renewable Energy Hub, or AREH, in Western Australia and become an operator in the project that plans to produce 1.6 million mt of renewable hydrogen a year at full scale, the energy firm said June 15.
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InterContinental Energy is the main project participant of AREH that would be situated in Pilbara, aiming to supply renewable power to local customers in the mining belts and also produce renewable hydrogen and ammonia for domestic and export markets.
"We believe AREH can be a cornerstone project for us in helping our local and global customers and partners in meeting their net-zero and energy commitments," Anja-Isabel Dotzenrath, executive vice president - gas & low carbon energy of BP said. "It will also serve as a long-term clean energy security contributor in Asia Pacific, helping countries such as South Korea and Japan to decarbonize."
BP did not give a time line, but in an interaction in December 2021, InterContinental Energy's Head of Australia Brendan Hammond told S&P Global Commodity Insights, the project can hit a 2027-2028 start date for production.
AREH has plans to develop onshore wind and solar power generation in phases to build a total generating capacity of up to 26 GW, BP said. It could produce 1.6 million mt of renewable hydrogen, or 9 million mt of renewable ammonia.
"When fully developed, AREH could provide significant net renewable generating capacity for BP as well as making a material contribution to its strategic aim to capture a 10% share in core hydrogen markets globally," BP said.
On its website, InterContinental Energy says hydrogen is projected to become a $2.5 trillion market by 2050.
The other participants in AREH with respective stakes held are InterContinental Energy at 26.4%, CWP Global at 17.8% and Macquarie Capital and Macquarie's Green Investment Group at 15.3%, according to InterContinental's website.
Platts assessed Western Australia hydrogen produced via alkaline electrolysis at $2.55/kg June 14, up 15.38% month on month, S&P Global data showed.
Japan hydrogen produced via alkaline electrolysis (including CAPEX) was assessed at $8.02/kg June 14, down 26.22% month on month.
In June 2021, Australia's then Minister for the Environment Sussan Ley told InterContinental Energy and its partners that an environmental referral for AREH would not proceed in its current form.
Subsequently, InterContinental Energy's Hammond said the company would make a renewed application for the environmental nod, keeping in view the matters raised by the environment ministry.
"We are continuing to develop the project from an engineering perspective and we will take the concerns raised [by the ministry] into account," Hammond told S&P Global in December 2021, adding that a 2025 financial closure goal for the project stood as before.
InterContinental also has the 50 GW Western Green Energy Hub project in Western Australia, the 25 GW Green Energy Oman project in Oman and the Saudi Arabia Renewable Energy Hub.
In April 2022, the Australian Government announced up to A$70 million ($48.35 million) of funding for a green hydrogen hub at BP's Kwinana site in Western Australia, which forms part of BP's broader plans to develop the site as an integrated energy hub that produces and distributes fuel for the future, BP said.
BP has been operating in Australia for more than 100 years and is engaged in the exploration and production of oil, natural gas and LNG, the marketing of petroleum and lubricant products and the development of low and zero carbon energy for its customers in Australia and the region.
It aims to become a net zero company by 2050 or sooner.