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Transforming the oil and gas industry to embrace the energy transition

Baker Hughes is positioning itself to fill a pivotal role in the transition to low and zero carbon

Baker Hughes
 Baker Hughes is committed to reducing emissions in their own operations while bringing  core technology capabilities to lower emissions for key oil and gas operators in Australia

Baker Hughes is committed to reducing emissions in their own operations while bringing core technology capabilities to lower emissions for key oil and gas operators in Australia

Despite the double black swan event with the COVID-19 pandemic and the crash in global oil prices, Baker Hughes is barrelling ahead at full speed to redefine itself, as it seeks to help the industry not only participate in but be an integral part of the energy transition.

While the pandemic and the oil price crash served as a wakeup call for many companies to join the efforts around energy transition in a bid to diversify, Baker Hughes Australia New Zealand and Papua New Guinea (ANP) vice president Graham Gillies notes his company had laid the groundwork to map out its path to carbon neutrality two years ago, in 2019.

"We recognized we were no longer an oilfield services company. We're an energy technology company and we have a portfolio that spans beyond oil and gas," he said.

"We were one of the first in the oil and gas industry to make a net zero commitment, in line with the Paris Agreement," Gillies said. Baker Hughes aims to reduce its Scope 1 and 2 emissions by 50% by 2030, and to achieve net zero emissions by 2050.

"While we are working to reduce our own emissions, we're also thinking of ways we can bring our core technology capabilities to lower emissions for our customers in oil and gas and the industrial."

Noting the oil and gas sector's crucial need to decarbonise, Gillies said this would involve ensuring our assets become more efficient and more productive, deploying existing emissions management technology, and positioning for new frontiers like carbon capture utilisation and storage (CCUS) and hydrogen.

"Energy efficiency is key to reducing emissions, and upgrades to existing gas turbines and compressors can help raise efficiency and lower emissions," Gillies said.

In fact, the latest compression technology Baker Hughes is providing for Qatar Petroleum's North Field East project will help reduce around 5% of CO2 per year, compared to previous technologies.

Baker Hughes is also working with NOVATEK, Russia's largest independent natural gas producer, to blend hydrogen into natural gas liquefaction, to reduce carbon emissions from LNG facilities.

"On top of that we have a number of technologies that allow customers to reduce methane venting, fugitives and flaring - which represent some of the most significant emissions reduction opportunities for the industry."

Baker Hughes' drone-based and ground-based methane monitoring system called LUMEN can accurately quantify methane leak rates, leak concentration and leak locations in plants including offshore and onshore upstream operations.

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Baker Hughes' NovaLT gas turbines are inherently designed for hydrogen and are capable of burning methane gas and hydrogen blends from as little as 5% to as much as 100% hydrogen



Its flare.IQ flare optimization system ensures high-efficiency flare combustion and helps reduce methane emissions in flare stacks. This not only drives efficiency and reduces operational cost, but it also helps the plant meet the regulatory requirements.

"Another way we are reducing emissions is by transforming what we make, how we make it and supply it, and how we work overall," Gillies added. "We are moving away from traditional steel pipes to composite materials and thermoplastics. We are redesigning our subsea systems to be modular and lightweight, for less waste and less footprint. We are also embracing circularity in our supply chain, by for example, reusing and recycling over 95% of the materials in our drill bit."

The interest from industry in these kinds of technologies is only set to increase, given renewed global efforts to curb greenhouse gas emissions and as global oil and gas companies set out to meet stringent new regulations and emissions reduction targets.

Gillies noted that energy transition and carbon reduction was something Baker Hughes was discussing with the customers even before the pandemic, but admitted it was a bit of a hard sell back then.

"Today, it's more of pull. We see that operators are very much engaged and are trying to understand the technologies that exist in the industry. We're in discussions with many of the operators in Australia on how our technology can help meet their emission targets," he said.

Baker Hughes is also investing in their technology offering for new energy spaces like CCUS and hydrogen.

"Our technology suite for hydrogen and carbon capture is very strong. We have gas turbines today that have already been tested for 100% hydrogen. We've got compression technology that is already capable of compressing the CO2 for reinjection back into reservoirs," he said.

To strengthen its CCUS offering, Baker Hughes acquired a company called Compact Carbon Capture (3C), which uses a differentiated capture technology and a compact, modularized format to reduce the equipment footprint by 75%. The company aims to scale and commercialize 3C's technology to deploy the technology for customers globally.

In March this year, the company also entered into an exclusive licensing agreement with SRI International to use its innovative Mixed-Salt Process for carbon capture - further complementing its CCUS technology portfolio for applications such as the treatment of flue gases from fossil fuelled power plants, gas turbines industrial applications and the cement industry.

The company continues to partner with other industry players in hydrogen. It recently announced a collaboration with Bloom Energy, a leader in distributed energy, to explore opportunities to pair Bloom Energy's solid oxide electrolyser cells that can produce 100% clean hydrogen with Baker Hughes' compression technology.

Gillies said the company's commitment to energy transition also plays a role in how we shape the workforce of the future.

"I think our employees now see it as an opportunity, because there is known capability and expertise from the oil and gas industry that we can take into the energy transition. This helps de-risk new projects in energy transition."

"There's also a positive momentum building from a social conscience perspective. We're moving into a space that looks after our people and the planet - and people are emotionally connected to that journey. They see it's the right thing to do."

Gillies emphasised that these conversations need to be followed by decisive actions, urging the industry to set strong emissions reduction targets and backing them up with strategies to achieve those targets.

"The path to net zero takes a whole-of-society commitment and execution to achieve the emissions reduction goals. We are working with oil and gas operators, industry groups, and local governments to align to this common goal - so that we can enable energy transition together."

ABOUT THIS COMPANY
Baker Hughes

Baker Hughes (NYSE: BKR) is an energy technology company that provides solutions for energy and industrial customers worldwide. Built on a century of experience and with operations in over 120 countries, our innovative technologies and services are taking energy forward – making it safer, cleaner and more efficient for people and the planet.

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