BP FORGES AHEAD WITH WA GREEN HYDROGEN DESPITE ‘HIGH COMPLEXITY’

BP will aggressively chase Pilbara miners to buy its green hydrogen ahead of exporting it, as the UK oil and gas major gets the ball rolling on the $US36 billion ($56 billion) green hydrogen project in Western Australia.

BP bought a 40.5 per cent share of the Asian Renewable Energy Hub in June. If fully developed, the hub would cover 6500 square kilometres of northwest WA with more than 1700 wind turbines – up to 290 metres high – and 18 large-scale solar farms.

BP chief financial officer Murray Auchincloss said he expects power to start flowing from the hub sometime between 2025 and 2027.

“First of all, it’s a domestic play,” he told investment analysts this week. “Can we bring green hydrogen or green power to the nearby mining and other industries?”

BP’s decision to chase domestic customers is the third attempt by stakeholders to generate revenue from 26 gigawatts of solar and wind energy, planned for a location remote even by the standards of northwest WA.

Since the hub was first conceived, demand for clean energy has appeared in the Pilbara with Fortescue aiming to be emissions-free by 2030 and fellow iron ore miners Rio Tinto and BHP planning substantial cuts in emissions.

The Asian Renewable Energy Hub got its name from a plan to use subsea cables to sell power to Java, Indonesia’s most populated island. The idea died from a lack of customers with the financial strength to underwrite the project with solid long-term power purchase agreements.

In 2020, the project’s proponents switched to using the emissions-free power to separate hydrogen from water using electrolysers, and then adding nitrogen to produce more easily transported ammonia for export.

The expansion from 15GW to 26GW and the addition of an export port was rejected in 2021 by then Coalition environment minister Sussan Ley as “clearly unacceptable”, as the port could affect a wetland bird habitat on Eighty Mile Beach protected by international agreements.

BP does have the WA government’s environmental approval to generate the 15GW planned for Java – equivalent to 12 of Victoria’s Loy Yang B coal-fired power stations – but would need approval to build a 250 km-long transmission line to Port Hedland to access mining customers.

BP’s stated timetable of 2025 is ambitious given delays to environmental approvals and a tight labour market in WA. The company’s hopes to export ammonia by the end of the decade pose an even tougher challenge.

“The complexity on the international play is quite high,” Auchincloss said, citing the need to lock in customers and secure “some pretty serious capacity for electrolysers.”

A BP spokesman said it was exploring options for the location of port and ammonia facilities based on project efficiency and input from stakeholders, including all three levels of government and the Traditional Owners of the land, the Nyangumarta people.

A power line to Port Hedland to access initial customers for power could be expanded later to supply a hydrogen and ammonia plant in Port Hedland, avoiding the difficulty of building and operating a complex facility at a remote location and the need for a new port near the protected wetland.