ENERGY TRANSITION

Woodside to build A$1B hydrogen production hub in Kwinana

WOODSIDE Petroleum has signed a landmark agreement with the Western Australian government to build a multi-gigawatt low-carbon hydrogen production facility at the Kwinana industrial hub, south of Perth.

A concept image of H2Perth. Credit: Woodside

A concept image of H2Perth. Credit: Woodside

The H2Perth facility will be built on 130 hectares of industrial land commercially leased from the WA government at the Kwinana and Rockingham Strategic Industrial Areas. 

The announcement was made by the government and a Woodside media release, however the company did not make an announcement on the ASX. 

The phased development will see the facility initially produce 300 tonnes of hydrogen per day and eventually scale up to produce 1500tpd. The hydrogen would be produced for both local demand as well as in the form of ammonia and liquid hydrogen for export.   

Woodside said it would use a combination of electrolysis and methane reforming to produce the hydrogen, with 100% of the emissions offset. 

The government said it expects Woodside to commit to some A$1 billion in capital expenditure. 

Woodside CEO Meg O'Neill said the facility would be a landmark project, both for Woodside and WA. 

"Woodside has a proud track record as an Australian oil and gas producer and our LNG exports will continue helping Asia reliability meet its energy needs while reducing greenhouse gas emissions for decades to come," she said.

"Now, we intend to use our skills and financial strength to add new energy products, and lower-carbon technologies and services to our portfolio, which can be scaled to meet customer demand."

She noted the land being leased from the state was ideally located close to existing gas, power, water and port infrastructure, as well as a skilled local residential workforce.

State premier Mark McGowan said the project was a great example of the type of renewable energy projects the state wanted. 

"Woodside will fully fund the construction and operation of this project to create one of the world's largest clean energy production facilities," he said. 

"Making hydrogen more affordable will accelerate the uptake of clean energy, and help our State move towards a renewable energy future and net zero by 2050."

/

Woodside acting CEO Meg O'Neill alongside WA hydrogen minister Alannah MacTiernan and development minister Rodger Cook. 

The company said the electrolysis component of H2Perth's production will have an initial capacity of 250MW, with potential to scale to more than 3GW, depending on customer demand and renewable energy growth. The initial phase of steam methane reforming will consume 40TJ of gas per day. Woodside said it would now begin community engagement on the project, along with detailed progress with customers. Depending on all approvals and a final investment decision, it expects construction to start in 2024. 

It is one of the first grid-connected hydrogen production facilities announced in Australia, with Woodside noting the electrolysers can help stabilise the network because they can be operated flexibly, helping the network support more intermittent renewable power.

Hydrogen minister Alannah MacTiernan said the scale of the project would help secure the local manufacture of critical components and would underpin an expansion of renewable energy in the South West Interconnected System. 

"We have more than 30 hydrogen project proposals on the table here in Western Australia, and we are proud to have worked with Woodside to deliver one of the world's first major clean hydrogen production facilities in WA."

The announcement comes weeks after Fortescue head Andrew Forrest announced a green hydrogen production hub in Queensland, telling media that Western Australia missed out because it could not secure land agreements with the state government. 

WA lands minister Tony Buti said the state government was finalising amendments to the Land Administration Act "to offer new opportunities through land tenure outcomes for the hydrogen industry throughout WA". 

"This announcement from Woodside is a clear example of how the WA Government can use strategic industrial areas in the State to fuel our renewable energy future," he said. 

The project is expected to create more than 2000 construction jobs and 200 ongoing local jobs. 

Clean State director Olivia Chapman told Energy News that Woodside's announcement was a step in the right direction but said hydrogen production should come entirely from renewable-powered electrolysis. 

"Renewable energy is now the cheapest form of energy to produce and WA has abundant solar and wind resources to lead the world in the clean energy transformation," she said. 

"WA needs decisive climate action; and big renewable energy projects to drive clean industry investment and generate thousands of good paying jobs in our state."

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

editions

ENB Cost Report 2023

ENB’s latest Cost Report findings provide optimism as investments in oil and gas, as well as new energy rise.

editions

ENB Future of Energy Report 2023

ENB’s inaugural Future of Energy Report details the industry outlook on the medium-to-long-term future for the sector in the Asia Pacific region.

editions

ENB Cost Report 2021

This industry-wide report aims to understand current cost levels across the energy industry

editions

ENB Social Licence Report 2021

In its second year, this research now includes trends and new findings surrounding impacts and responses as the energy industry seeks to secure and maintain a social licence to operate.