Overall the economics remain unclear and depend on location, scale, and markets, but the project is technically feasible, BP said today of the project, which most likely would be based in the Mid West not far north of the state.
The oil giant is convinced the state is ideally positioned for green hydrogen and green ammonia production using renewable energy, although development will need "significant" investment in infrastructure and ports as well as water and power distribution. Water resources, integral for green hydrogen development, were only glancingly mentioned once.
The company's investment in Australia's upstream is relatively small. It will join Santos' Moomba CCS project dependent on a positive final investment decision and last year drilled duster Ironbark-1 offshore Western Australia.
It also shares an offshore permit with Santos in the Carnarvon Basin.
"The study found that the production of green hydrogen and green ammonia using renewable energy is technically feasible at scale in Australia," BP said today.
The company sees the state's huge renewable resources and proximity to large, long term markets make it the ideal place to create the commodities at export-scale.
It will make public its feasibility study as part of a knowledge sharing agreement with the Australian Renewable Energy Agency and will work with "key stakeholders" to develop its plans.
It will also define the technical and infrastructure solutions, customer demand and business models that would be required for a successful development, it said today.
"This looks particularly promising in the midwest of WA, which has existing infrastructure, access to land and abundant renewable energy resources such as wind and solar," president, BP Australia and SVP fuels & low carbon solutions Frédéric Baudry said.
The company announced its study in May with support from ARENA and BHD Advisory looking at the ability for a project to supply 4000 tonnes of hydrogen that would create 20,000t of green ammonia at a pilot level and 200,000t of hydrogen to create 1MMt of ammonia. The green hydrogen would be combined with nitrogen pulled from the air.
"The study found that distribution could be customised to suit customer requirements, including gaseous or liquid hydrogen or ammonia via pipeline, truck, train or ship," it said.
"Economic returns were also explored, and it was found that for this to be effectively understood the renewable hydrogen and ammonia markets need to be further advanced. Scale matters: only at large scale could these projects be economic."
An infrastructure build out might be needed, but this will depend very much on location.
"BPs analysis of the economic opportunity presented by renewable hydrogen will help Australia determine how it can be scaled-up to satisfy future demand," ARENA CEO Darren Miller said.
"The report represents a vital building block in our pathway to creating a fully integrated renewable hydrogen supply chain, allowing Australia to become leaders in a future export industry."
