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Sinopec aims Yuan 30 billion investment through 2025 to boost hydrogen strategy

Highlights

Plans to invest $4.6 billion in hydrogen through 2021-25

Hydrogen expansion to lower carbon emissions by 10 mil mt/year

To install 4 GW of wind, solar power capacity

Sinopec plans to make hydrogen the cornerstone of its energy transition strategy with an investment of Yuan 30 billion ($4.64 billion) for developing the fuel through 2021-25, Ma Yongsheng, the president of the world's largest refining company, said Aug. 30.

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"[Sinopec] is targeting to become China's top hydrogen company, making [the fuel] a new driver of growth for the company while also developing solar, wind and biomass power," Ma said while discussing the company's interim results, adding that Sinopec aimed to integrate clean energy development with conventional energy to achieve its net-zero goal.

The company's investment in hydrogen would help it cut CO2 emissions by more than 10 million mt/year by the end of China's 14th Five Year Plan in 2025, according to Ma.

These efforts include constructing 1,000 hydrogen refilling stations with an overall service capacity of 200,000 mt/year by end-2025, Ma said.

Currently, the company's marketing and distribution arm has constructed 20 hydrogen refilling stations and is set to build another 80 stations in 2021.

Sinopec has the biggest retail network in China with 30,716 gas stations, which makes it easier for the company to secure hydrogen retail outlets.

A part of the investment will go into the refining business for hydrogen purification facilities, green hydrogen production from renewables, and its utilization in the refining process.

Sinopec is targeting green hydrogen production capacity of more than 1 million mt/year by 2025, Ma said.

In first-half 2021, Sinopec completed construction of four hydrogen purification units at refineries in Yanshan, Guangzhou, Gaoqiao and Hainan. The purification unit at Yanshan Petrochemical can produce 99.999% pure hydrogen, which will be used for transportation in the 2022 Winter Olympics in Beijing, according to the company.

Sinopec's hydrogen production capacity from its refining processes was 3.5 million mt/year, accounting for 14% of China's hydrogen output, the company said earlier this year. Its primary refining capacity stood at 5.98 million b/d by end of 2020.

Solar, wind, biomass

In the solar power arena, Sinopec aims to build photovoltaic power installations with charging piles at about 7,000 of its retail outlets across the country by end-2025, with a total installation capacity of 400 MW, Senior Vice President Liu Hongbin said Aug. 30.

"We have completed construction of 32 photovoltaic power installations, with 1.5 MW capacity," Liu said, adding that the company planned to build 1,000 such installations in 2021.

By June 30, Sinopec had 205 PV power installations, according to a company release.

Liu also said the company will take advantage of its refineries' locations to develop offshore wind power.

Unlike PetroChina, which has most of its refineries near onshore oil fields, majority of Sinopec's plants are along the coast.

Sinopec was studying the feasibility of developing offshore wind power at its Gulei petrochemical plant in southeastern China's Fujian province with local companies, according to Liu.

The company plans to build 2 GW each of solar and wind power in 2021-25, Liu had said previously.

Moreover, Sinopec is also setting a goal to become a top producer and supplier of biofuels. Liu said Aug. 30 that it is targeting to have 100,000 mt/year of bio-jet fuel production capacity, and 1.45 million mt/year of ethanol-blended gasoline sales by 2025.

CCUS

Sinopec plans to develop CO2 solidification technology for its own use and to supply to the market, Ma said.

"We are investing in research and development to use CO2 as feedstock to produce methane and further process it into chemical products and high-end materials," Ma said.

Sinopec's upstream and refining segments have invested in China's first 1 million mt/year carbon capture, utilization and storage project in Shandong province.

It is a joint project executed by Sinopec's 14 million mt/year Qilu Petrochemical and its flagship Shengli oilfield.

The CCUS project will use CO2 produced and captured by Qilu Petrochemical during its refining and production process. The CO2 would be injected into 73 oil wells in the Shengli oilfield to boost crude production. The project is targeted for commissioning by end-2021.