Energy giants Chevron and Uniper are pairing with chemical technology companies Air Liquide and LyondellBasell to explore a hydrogen and ammonia production facility along the U.S. Gulf Coast that could support industrial decarbonization and mobility applications in the region and expand clean ammonia exports.
The companies, in a joint statement on Oct. 19, said they intend to collaborate on a joint study to evaluate and potentially advance the potential project. The project could entail “the end-to-end energy value chain, utilizing each participant’s technical expertise in production, operational experience, storage, distribution, and export logistics,” the companies said.
While the companies did not specify a size for the project, each of the consortium’s partners has been separately developing capabilities and expertise in air separation technology, hydrogen technologies, lower carbon intensity and renewable natural gas, carbon capture and storage (CCS), electrolysis-based technologies, and petrochemicals.
The companies said that the project could “leverage existing advantages along the Gulf Coast, including pipeline infrastructure, to supply lower carbon and renewable hydrogen to local industrial clusters.” Likewise, “ammonia infrastructure could support exports to both Europe and the Asia Pacific region,” they said.
A Skilled Consortium
Air Liquide, a world leader in industrial gas supply, including oxygen, nitrogen, and hydrogen, in January 2021, inaugurated one of the world’s largest proton exchange membrane (PEM) electrolyzers in Bécancour, Québec. The 20-MW PEM electrolyzer, equipped with Cummins technology, sources wind and hydropower from Hydro-Québec for the hydrogen market in the northeast. The PEM project supplied a recently completed GE aeroderivative gas turbine project to demonstrate hydrogen combustion as part of a retrofit at an existing U.S. natural gas power plant, which successfully utilized blends of 5% to 44% hydrogen with natural gas.
“The Gulf Coast is the ideal location to model hydrogen and carbon capture technologies as immediate pathways to decarbonizing hard-to-abate sectors. This project exemplifies Air Liquide’s commitment to decarbonizing industrial basins around the world,” said Adam Peters, CEO of Air Liquide North America. “Prioritizing sustainable technologies, like hydrogen and carbon capture, means we can provide energy transition careers for many thousands of American workers while building a more sustainable energy future for all.”
Uniper, Germany’s giant utility that holds a 33 GW generation fleet, is working to decarbonize its business in Europe by 2035, including its 2,200 TWh natural gas procurement portfolio. While the German government recently took over the company, the company has been working on several hydrogen initiatives, including power-to-gas.
“Uniper is very excited to collaborate with this unique group of companies to explore a truly transformative U.S. Gulf Coast hydrogen infrastructure project,” Marc Merrill, President and CEO of Uniper in North America, said in a statement. “We look forward to bringing the best of our U.S. business and global technical and commercial platforms to support this effort. Uniper is committed to the green expansion of our Wilhelmshaven [liquefied natural gas] receiving terminal in Germany and expects to receive and store roughly 1 [million tonnes per annum (Mpta)] of clean ammonia at the port by the end of the decade. U.S. Gulf Coast supply from this initiative can be critical to meeting that goal.”
Chevron, an integrated energy company that produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals, and additives, is actively investing in scalable low-carbon solutions under its Chevron New Energies business segment. The company already produces about 1 million tonnes per year of hydrogen through its traditional business and has experience in retail hydrogen going back to 2005. The company is also actively deploying CCS, including at Gorgon, Australia, one of the world’s largest integrated CCS projects. “Across the value chain, collaborations are critical to developing a hydrogen ecosystem, and this is an example of bringing together leaders in the space to explore lower carbon hydrogen opportunities and to contribute complementary expertise,” said Austin Knight, vice president of Hydrogen at Chevron New Energies.
LyondellBasell has also recently stepped up its circularity and climate ambitions and actions to address the global challenges of plastic waste and decarbonization. “While our products play an important role in helping to enable greenhouse gas emissions reductions through their use in renewable energy technologies, such as wind turbines, solar panels and electric batteries, we are also taking concrete steps to reduce the greenhouse gas emissions from our operations,” said Aaron Ledet, senior vice president of Olefins and Polyolefins Americas at LyondellBasell.
Major Projects Developing on the Gulf Coast
The consortium’s announced plans follow several significant announcements in recent months by major energy and chemical companies for the Gulf Coast. In September, OCI N.V., an Amsterdam, Netherlands–headquartered producer and distributor of hydrogen-based products that provides low-carbon fertilizers, fuels, and feedstock to agricultural, transportation, and industrial customers, said it would leverage the Inflation Reduction Act (IRA’s) 45Q measures to kick off construction of a 1.1 Mtpa blue ammonia facility that will feature infrastructure to enable potentially doubling its capacity to 2.2 Mtpa.
“Blue ammonia is produced from hydrogen derived from natural gas where the CO2 by-product is captured and sequestered. Green ammonia is produced from hydrogen based on renewable sources such as wind and solar rather than fossil fuels,” the company explained. OCI noted that its two core products, ammonia and methanol, “are the most promising hydrogen carriers to drive the hydrogen economy and enable the energy transition.”
OCI’s project has been designed to transition from blue to green ammonia production in the future as green hydrogen becomes available at larger scale,” the company said.” OCI has reported the project is well underway. Detailed engineering and procurement work started earlier this year, and production is targeted for Q1 2025, the company said. The “optimal location” in Beaumont, Texas, near Houston, has “easy access to both the US and export markets including Europe and Asia to serve significant expected demand for clean hydrogen,” it said.
In another notable project announced in September, Uniper and Japanese power giant JERA said they will collaborate with ConocoPhillips to pursue fuel supply projects for clean ammonia and LNG to meet domestic demand and JERA’s and Uniper’s European fuel supply needs across the short-, medium- and long-term. The companies are developing green and blue ammonia export projects. One project envisions initial production of 2 Mtpa with expansion potential from the Gulf Coast, including both green and blue clean ammonia production when CCS facilities are available.
A project engineering study is slated to be completed by year-end to develop the first phase of the project, which will assess green and blue hydrogen opportunities. JERA and Uniper expect the project will reach commercial operation in the late 2020s, including a complete certified CCS program.
“Both companies are working jointly to optimize their LNG portfolio. As a result, Uniper will be able to supply additional LNG to Germany and JERA to Japan and beyond,” the companies said.
“The combination of a skilled workforce, plentiful natural gas, abundant renewable resources, deep-water ports, and ideal CCS geology make the U.S. Gulf Coast uniquely advantaged to produce the low carbon fuel to enable the Atlantic and Pacific energy markets transition,” noted Steven Winn, CEO of JERA Americas, which is based in Houston. “JERA and ConocoPhillips will be a low-cost ammonia supplier to domestic and international markets. We believe this project offers a unique opportunity to support Germany’s decarbonization efforts while advancing ammonia technology development for hydrogen distribution and industrial decarbonization.”
[Ed. correction (Oct. 21, 2022): The original post incorrectly identified OCI as a South Korean-based company. OCI N.V. is actually headquartered in Amsterdam, Netherlands.]