NGS’ NG/LNG SNAPSHOT – Apr 16-30, 2023
City Gas Distribution & Auto LPG
CONCOR orders 100 LNG trucks at Blue Energy Commercial Vehicles
NEW DELHI : Container Corporation of India Ltd (CONCOR) has placed an order for 100 liquefied natural gas (LNG) trucks at Pune-based Blue Energy Commercial Vehicles Pvt Ltd as the state-owned company takes first steps to cut hazardous emissions and align with the government’s larger climate change goals.
Separately, Concor has ordered 100 trailers at Raigarh, Chhattisgarh-based Jagdamba Trailers Pvt Ltd, that will carry the steel containers on the LNG trucks, sources said. Concor declined to divulge details of the order. During the earnings call on the third quarter financial results held on 24 January, V Kalyana Rama, Chairman and Managing Director, Concor, revealed the company’s plan to introduce LNG trucks for the first and last mile movement of containers.
“We will be experimenting with LNG transfers at our major hub Kathuwas and then we will be expanding it to all the terminals,” Kalya Rama said on 24 January.
“All these new things we are bringing…because the demand is there in domestic sector and also to encourage more and more domestic traffic into containers and to add value-added services and to make it a complete business solution which will increase our margins so that the overall margin pressure will not be too much,” he added.
A zero-emission truck technology start-up, Blue Energy Commercial Vehicles – known by its brand name Blue Energy Motors – is a portfolio company of Exponentia Ventures, a Dubai-based fund run by Anshuman Ruia, a second generation of the Ruia family that founded Essar Group.
FPT Industrial, the global Powertrain brand of Iveco Group, has a minority stake in Blue Energy Motors.
Globally, logistics contributes to 14-15 percent of carbon emissions and in that the contribution of heavy-duty trucking is about 90 percent.
The trucking industry is one of the most significant polluters, producing up to 450 million tonnes per annum of CO2, as well as significant noise, particulate matter, and pollutants each year.
Therefore, LNG trucks are poised to upend the sector and hasten the shift to “green transportation, Blue Energy said on its website.
Compared to diesel trucks, an LNG truck emits up to 28 percent less carbon dioxide (CO2) and up to 30 percent less noise. It can also raise an organization’s scores on the environmental social and governance (ESG) ratings.
When appropriately utilised with trained drivers, LNG trucks have the potential to reduce particulate material (PPM) by up to 91 percent.
To combat the rapidly rising climate change, LNG is seen as an immediate, versatile, mature, and scalable solution to make the long-haul trucking industry sustainable, says Blue Energy Motors. It’s a cleaner and greener fuel, which reduces sulphur oxide (SOX) up to 100 percent and nitrogen oxide (NOX) up to 59 percent.
LNG Trucks have seen a great deal of success in the Chinese and European markets.
India is looking to transition to a gas-based economy by 2030, increasing gas’s current share of the energy mix from 6 percent to 15 percent.
City gas distribution networks achieve tenfold increase in districts’ coverage
New Delhi: The government on Monday said its city gas distribution (CGD) networks achieved a tenfold increase in its districts’ coverage, which grew from 66 in 2014 to 630 in 2023.With this, the number of domestic PNG connections from a merely 25.40 lakh in 2014 went up a whopping 103.93 lakh in 2023.
The government said 78 lakh PNG connections provided in the last nine years, according to a statement from the Ministry of Information and Broadcasting.The city gas distribution (CGD) networks are an interconnected system of underground natural gas pipelines for supplying piped natural gas (PNG) and compressed natural gas (CNG).
While CNG is predominantly used as auto-fuel, PNG is used in domestic, commercial and Industrial segments. These networks are a part of the government’s efforts to promote sustainable growth and to reduce greenhouse gas emissions and pollution.According to the statement, this creation of a natural gas ecosystem is in sync with the government of India’s thrust on promoting a gas-based economy that will reduce environmental pollution and act as a catalyst for overall economic development.The central government is promoting alternative fuels which inter alia include Liquified Natural Gas (LNG), Green Hydrogen, Compressed Bio-Gas (CBG), ethanol, for the reduction in greenhouse gas emissions. City Gas Distribution Network takes massive strides to offer convenient and affordable fuel.
A strong emphasis has been laid on the expansion of city gas distribution (CGD) networks across the country, with a potential to make gas accessible to over 70 per cent of the population, according to the website of the Ministry of Petroleum and Natural Gas. The distribution networks would enable the supply of cleaner cooking fuel, like, PNG, to households, industrial and commercial units as well as transportation fuel such as CNG to vehicles.
Assam CM Himanta Biswa Sarma opens CNG station, gas pipeline in Golaghat
GUWAHATI: Chief minister Himanta Biswa Sarma on Friday inaugurated the CNG station and gas pipeline at Hazarigaon well site at Naharbari in Golaghat district as a part of state government’s step towards popularising green energy in the state
Sarma, in a tweet, said, “Setting up of CNG stations is a step towards popularising green energy in Assam. In the past two years, there is peace and a positive atmosphere in our state. We will be soon able set new milestones in industrialisation in Assam.”
Gas from the Hazarigaon block will be one of the prime contributors to the 100 CNG buses initiative run by the state government in Guwahati and will also support tea growers across the state.
Cairn Oil & Gas has signed a gas sales agreement with Assam Gas Company Limited (AGCL) to sell 3.5 million standard cubic feet per day (MMSCFD) of gas from the Hazarigaon field.
Cairn Oil & Gas stated that the Hazarigaon filed awarded in the DSF-II auction is the first Discovered Small Fields (DSF) block in the northeast.Commenting on the new production asset, Nick Walker, CEO of Cairn Oil & Gas, said, “We are delighted to become the first company to commence operations from a DSF block in the northeast region.”
Karnataka struggles to meet Centre’s PNG target
With the upcoming elections, the public is anxiously seeking assurance from candidates about obtaining piped natural gas (PNG) connectivity to their apartments or houses in their respective localities.
As PNG, which is cheaper and more convenient than LPG cylinders, gains popularity, the state government has drafted a new policy on City Gas Distribution (CGD) aimed at clearing hurdles that hinder the expansion of the gas pipeline network and increasing gas utilisation in the state.
The policy gains significance as Karnataka lags behind the Centre’s target of achieving 92 lakh PNG connections to households in the next seven years, and the Government of India (GOI) aims to increase the share of natural gas in the country’s primary energy mix from 6.2 per cent to 15 per cent by 2030.
Some key features of the policy include uniform permission charges in the state for laying gas pipeline networks, similar to the permission charges for laying optic fiber cables already fixed by the state, time-bound granting of permissions for laying gas pipelines, making available Civic Amenity (CA) land for CNG infrastructure (such as CNG dispensing stations, City Gate Stations, DRS, etc) after receiving applicable payments, banning polluting fuels in industrial areas, and promoting CNG vehicles in the state.
According to a CGD expert, “Some provisions, such as time-bound grant of permissions, are currently applicable only to GAIL Gas Ltd, which operates in districts such as Bengaluru (Urban & Rural) and Dakshina Kannada. While this has helped GAIL Gas to meet its Minimum Work Programme (MWP) in Bengaluru, the seven other entities, including BPCL, Maharashtra Natural Gas Limited (MNGL), AG&P, Mega Engineering Ltd, Indian Oil Adani Gas Ltd, Adani Total Gas Ltd, Unison, etc, whose geographical areas cover the rest of Karnataka, have not made much progress due to various hindrances faced by them in the districts.”Like water and electricity, CGD projects are categorised as public utility projects.”PNG and CNG are considered economic, eco-friendly, safe, and convenient fuels, but the general public has yet to reap these benefits due to the delay in expanding the network. We believe the new policy will address existing gaps. It will also help the state address the problem of carbon emission,” said the expert.
The CGD entities have been requesting the state government to come up with a policy by taking cues from other states that have come up with progressive policy measures to support the CGD project.
Cairn Oil & Gas commences gas flow from Hazarigaon field in North-Eas
Cairn Oil & Gas, a unit of Vedanta Ltd, on Friday said it has commenced test production from its Hazarigaon field in Assam that it had won in a discovered small field (DSF) bid round. “The gas produced by Cairn Oil & Gas is evacuated through a main trunk pipeline, and a gas cascading system to AGCL,” the firm said in a statement.
“The gas evacuation from the field will be used by tea growers among other industries.” Additionally, the gas cascading system will enable gas from Hazarigaon to be a prime contributor in fueling 100 CNG buses that will be plying in Guwahati as part of the clean energy initiative of the Government of Assam. Commenting on the new production asset, Nick Walker, CEO of Cairn Oil & Gas, said, “We are delighted to become the first company to commence operations from a DSF block in the North-East region. The region holds significant potential and is a key focus for us at Cairn Oil & Gas as we move towards our goal of doubling production and supporting energy security for the country.”
Assam, he said, has a significant potential for unlocking hydrocarbon reserves and with government support, infrastructure, and fast-tracked approvals to continue exploration activities, the region can support India’s vision to be self-reliant in oil and gas. The company plans to drill 5 to 10 exploration wells in the next two years across the Golaghat, Jorhat and Tinsukia districts of Assam. Cairn holds 7650 square kilometres of acreage in Assam-Arakan Basin with 12 Open Acreage Licensing Policy (OALP) and 3 Discovered Small Fields (DSF) blocks.
“The acreage has a significant resource potential of up to 1 billion barrels of oil equivalent,” the statement said. Cairn has also conducted large-scale airborne gravity magnetic and seismic survey for exploration. Cairn Oil & Gas entered into a gas sales agreement (GSA) with AGCL that laid down the infrastructure for distribution of cleaner fuel to the industry through pipelines. The company is working closely with AGCL and other infrastructure companies to make gas accessible to industries in Assam. “By the end of April, evacuation of gas in Hazarigaon is expected to ramp up as tea industry demand increases,” it added.
Policy Matters/ Gas Pricing/ Others
New pricing norms cut earnings downside for gas producers: S&P
New Delhi: India’s new gas pricing regime will offer greater downside protection for earnings of gas companies such as Oil and Natural Gas Corp (ONGC) and Oil India Ltd, S&P Ratings said on Friday. The new norms will not affect the pricing for gas produced from difficult fields that companies like Reliance Industries Ltd operate.
Under the new guidelines announced on April 6, 2023, the government will set prices for domestically produced gas on a monthly basis; the rate will be 10 per cent of the average price of the Indian crude basket in the preceding month. The price will have a floor of USD 4 per million British thermal unit (mmbtu) and a ceiling of USD 6.5 per mmBtu.
“We expect the new gas pricing terms to result in more fluid market price revisions,” said S&P Global Ratings credit analyst Shruti Zatakia.
Under the earlier regime, prices were reset semi-annually and were linked to gas prices in key international trading hubs.
The pricing mechanism for gas production from deep water, ultra-deep water, high-temperature, and high-pressure fields is unchanged. This means companies such as ONGC and RIL that operate such fields will maintain marketing and pricing freedom, subject to a ceiling price that is revised semi-annually.”The floor price means ONGC will be able to generate a minimum of USD 4 per mmBtu on its gas production even if international natural gas prices decline to historical lows. The company’s realizations averaged USD 2 per mmBtu-USD 3 per mmBtu during low hydrocarbon prices in 2020,” S&P said in a statement.
The price ceiling will restrict earnings’ upside for ONGC, particularly amid current elevated prices. The price cap of USD 6.5 per mmBtu for the next two years is lower than the administered price of USD 8.57 for October 2022-March 2023. In contrast, the ceiling price for output from difficult fields remains unchanged at USD 12.11 per mmBtu for April 2023-September 2023.The gas pricing reforms are intended to ensure more stable and affordable gas prices, and therefore fuel demand for natural gas. They also align with India’s ambitions of increasing the share of natural gas in the energy mix to 15 per cent by 2030 from 6.5 per cent now. Gas accounts for almost 50 per cent of ONGC’s production volume.”We believe the gas price reforms and the currently favourable crude oil prices will incentivise ONGC to scale up capital investments over the coming 12-18 months,” said Zatakia.
“This will be critical given the company’s crude oil production has been hit by ageing oilfields and delays and cost escalations on new discoveries.”Geopolitical issues in international markets in fiscal 2023 (ended March 31, 2023) exacerbated the problem. The new guidelines allow ONGC and OIL to charge a premium of 20 per cent over the administered price for gas produced from new wells and from technology interventions in existing wells.
ONGC will likely maintain some cushion in its current stand-alone credit profile (SACP) assessment of ‘BBB+’.”Under our forecasts, the company’s ratio of funds from operations to debt ratio will be 45-50 per cent in fiscal 2024 and fiscal 2025 under the new price regime. This is even if international crude oil prices retreat to mid-cycle levels of about USD 55 per barrel. ONGC is also unlikely to breach our 40 per cent threshold for a lower SACP even if its annual capital expenditure is Rs 50,000-55,000 crore in such a scenario over the period,” S&P said.
Hardeep Singh Puri confident of meeting 20 % ethanol blending target next fiscal
Oil minister Hardeep Singh Puri on Monday exuded confidence of meeting the target of supplying petrol mixed with 20 per cent ethanol by 2025, five years earlier than the previously planned roll-out in 2030. Petrol blended with 20 per cent ethanol was rolled out at select petrol pumps in 11 states and Union Territories in February as part of a programme to increase use of biofuels to cut emissions as well as dependence on foreign exchange-draining imports.
At present, 10 per cent ethanol is blended in petrol (10 per cent ethanol, 90 per cent petrol) and the government is looking to double this quantity by 2025. “I am sure we will be able to supply 20 per cent ethanol blended petrol by next (fiscal) year,” he said.
India saved as much as Rs 41,500 crore in forex outgo from 10 per centblending besides benefiting the farmers, he said at a biofuels conference here.Puri said India achieved blending of 10 per cent ethanol in petrol in June2022, five months ahead of the schedule.”We also advanced the availability of E20 blended petrol to 2025, five yearsfrom earlier planned in 2030,” he said.Use of ethanol, extracted from sugarcane as well as broken rice and other agriproduce, will help the world’s third largest oil consumer and importingcountry cut its reliance on overseas shipments. India currently is 85 per centdependent on imports for meeting its oil needs. Also, it cuts carbon emissions.
Use of E20 leads to an estimated reduction of carbon monoxide emissions byabout 50 per cent in two-wheelers and about 30 per cent in four-wheelerscompared to E0 (neat petrol). Hydrocarbon emissions are estimated to reduceby 20 per cent in both two-wheelers and passenger cars.India spent USD 120.7 billion on import of crude oil in 2021-22 fiscal (April2021 to March 2022). During first 11 months of 2022-23 fiscal it spent USD211.6 billion on crude oil imports.As much as 440 crore litre of ethanol was blended in petrol during the supplyyear ending November 30, 2022. For the next year, 540 crore litresprocurement is being targeted with an eye to start larger volumes of blending.The target of achieving average 10 per cent blending was achieved in June,2022, much ahead of the target date of November, 2022. Encouraged by thesuccess, the government advanced the target of 20 per cent ethanol blendingin petrol from earlier 2030 to 2025.
Electric Mobility/ Hydrogen/ Bio- Methane
IGGL completes Asia’s largest underwater hydrocarbon pipeline across Brahmaputra: CEO
Guwahati: Asia’s largest underwater hydro-carbon pipeline, below the river Brahmaputra connecting Jorhat and Majuli in Assam has been completed by the Indradhanush Gas Grid Limited (IGGL), the company’s CEO Ajit Kumar Thakur said on Saturday.
The challenging task of laying a 24-inch diameter hydrocarbon pipeline beneath the mighty Brahmaputra river by Horizontal Directional Drilling (HDD) method was completed on Friday, marking the completion of a major milestone in the construction of the North East Gas Grid (NEGG) connecting North East India to the National Gas Grid.
The total length of the pipeline in this single HDD crossing is 4,080 metre across the main water channel of Brahmaputra river.
This is the longest river crossing by any hydrocarbon pipeline of size 24-inch diameter and above in Asia and the second longest in the world, he claimed.This one of a kind HDD river crossing was executed by intersection method, where two HDD rigs simultaneously started drilling from the two sides of Brahmaputra with intersection of the two drilling heads in the middle at 30 metre beneath the river bed.
The laying of 4,080 metre pipeline section was completed by overcoming numerous hurdles faced mainly due to monsoon rains and flood, he said.
The total length of HDD crossing across the Brahmaputra river considering all major and minor water channels is 5,780 metre.
The pipeline was laid in three separate HDD sections of length 1000 M, 4080 M and 700 M with the first and the third sections completed earlier.
The next step will be tie-in of the three sections at two points, which will be located at 15 M and 8 M below Natural Ground Level (NGL).
“With the completion of the Brahmaputra HDD, IGGL has achieved more than 71 per cent physical progress of the NEGG Project and will be able to complete the Guwahati-Numaligarh section of the project by February 2024”, Thakur said.
He thanked the Assam government for being extremely supportive in implementing the project.
Indradhanush Gas Grid Limited, is a joint venture company of five major Oil PSUs – IOCL, ONGC, GAIL, OIL and NRL. It is implementing the North East Gas Grid Project connecting the major cities and demand centres of North East India with the National Gas Grid.
The 1656 km long natural gas pipeline is constructed at a project cost of Rs 9,265 crore.
All-electric MG Comet EV launched in India
The much-awaited MG Comet electric car is now officially on sale in India at Rs 7.98 lakh ex-showroom. The MG Comet EV is the carmaker’s second all-electric offering after the MG ZS EV, which was first launched in 2020. With the Comet, MG is targeting the mass market.
The MG Comet features a quirky design, with a boxy overall look, small wheels, a large windscreen, rectangular windows, and vertically stacked headlights. The Comet is sure to stand out compared to any other car in the Indian market today.
Bookings for the MG Comet will commence from May 15 and deliveries will begin the same month itself, however, in select cities.
Targeted to be an urban commuter, the MG Comet EV gets a 17kWh battery pack that offers a range of 230km. The car is powered by an electric motor on the rear axle and takes around 8.5 hours to charge fully with an AC charger.
The MG Comet’s primary rival in the Indian market will be the Tata Tiago EV, which is powered by a 19.2kWh battery pack, or a larger 24kWh pack, which offers a range of over 300km. However, unlike the Comet, the Tiago EV features fast charging, which can juice up the battery to 80 percent in 57 minutes.
However, MG is clear that the Comet is targeted at customers in the city and is not for those who travel more than 100km every day and for those who go on long trips.
Inside, the MG Comet EV gets two 10.25-inch displays, one being the infotainment system and the other an instrument cluster. The Comet offers wireless smartphone connectivity, connected car tech, over 100 voice commands, and the ability to use your smartphone as the key.
The carmaker also offers several personalisation kits in the form of bodywork and decals to make the Comet stand out from not just any other car, but other Comets as well.
Natural Gas / Transnational Pipelines/ Others
US: Biden administration OKs Alaska natural gas exports, drawing progressive ire
The Biden administration on Thursday greenlit natural gas exports from a facility in Alaska, drawing ire from progressives who were already frustrated over the administration’s prior approval of a major oil drilling project in the state.
The Energy Department reaffirmed a Trump-era decision to allow a company called Alaska LNG to export liquified natural gas (LNG) produced in the state to countries with which the U.S. doesn’t have a free trade agreement.
The department had previously agreed to a request from the Sierra Club to conduct further study of the project’s environmental impacts, saying that it would either reaffirm, alter or “set-aside” the Trump-era order.
It ultimately found, however, that the environmental impacts it identified “are not sufficient” to change the past determination approving the exports.
But it does add an environmental stipulation: Alaska LNG will have to certify every month that it did not use a practice called venting in which excess gas is released into the air and contributes to climate change.
In a statement, the department characterized its move as “amending a 2020 decision to impose new environmental requirements.”
But the reaffirmation still rankled both environmental advocates and congressional progressives.
“Allowing LNG exports is yet another way @POTUS is putting our kids’ futures in jeopardy,” tweeted Rep. Jamaal Bowman (D-N.Y.)
“The recent choices of this administration have been reckless, irresponsible, and uninformed. Our kids deserve a livable future and you are throwing it away.”
It comes after the Biden administration last month approved the Willow Project – which will allow ConocoPhillips to drill for 576 million barrels of oil in Alaska over a 30-year period.
“This is not the climate presidency that Joe Biden promised,” said Lukas Ross, program manager at Friends of the Earth. “Does the administration intend to rubber stamp a carbon bomb every month?”
Last year, the Biden administration also expanded LNG exports to Europe as part of an effort to counter Russia, the world’s second largest producer of natural gas.
Finland: Eesti Gaas signs agreement to buy Latvian gas network
Eesti Gaas will acquire the Latvian gas distribution network owned by Gaso, a subsidiary of Latvijas Gaze, for €120 million.
Eesti Gaas, the largest privately owned energy company in the Baltic and Finnish region, signed an agreement on Friday.
The transaction is subject to approval from the Latvian Competition Authority and permission from the Latvian government, as Gaso is considered a strategic asset.
The Latvian gas network is almost four times larger than Estonia’s, serving about 400,000 consumers, Ain Hanschmidt, chairman of the board of Eesti Gaas, said in a statement.
“We see a future in gas and know how to do this business and grow it. We hope that we can share our experience as a gas network operator and that the change of ownership will help the company continue to grow and provide the best service to Latvian gas consumers,” he said.
“Like the rest of Europe, we see gas playing an important role as a transition fuel and a supporter of renewable energy. The prospect of gas use encourages us to invest in gas networks – we have signed the agreement and are waiting for the decision of the Latvian government,” Hanschmidt added.
Eesti Gaas operates in Finland, Latvia, Lithuania and Poland under the Elenger brand.
Eesti Gaas provides natural gas to customers in the form of pipeline gas, compressed natural gas (CNG) and liquefied natural gas (LNG) and manages the largest gas network in Estonia.
Australia plans to extend natural gas price cap to 2025
Major LNG exporter Australia plans to extend the cap on domestic natural gas prices until July 2025 in a bid to ensure Australian gas supply at “reasonable prices,” the government said on Wednesday.
Energy companies operating in Australia are rattled by last year’s cap on domestic gas prices, which has already led to at least one investment project being put on hold. The cap, introduced in December, was initially intended to last until the end of 2023 as a measure to curb spiking gas prices.
Now the government plans to extend the cap through the middle of 2025, exempting small producers from the price cap if they supply gas only to the domestic market. Larger producers can also be exempted from the price cap if they make supply commitments to provide enough natural gas for the domestic market.
The government’s draft proposal, the so-called Gas Code, is now open for consultation until May 12, 2023.
“The Gas Code will ensure sufficient supply of Australian gas for Australian users at reasonable prices, give producers the certainty they need to invest in supply, and LNG producers to meet their export commitments,” the government said.
Still, Australia’s main energy trade partners and allies are increasingly concerned about the latest proposals for energy market interventions in Australia, which could also undermine new investment plans in Australian natural gas and other energy resources. Earlier this year, the Australian government proposed reforms to the Australian Domestic Gas Security Mechanism (ADGSM), “to ensure that there is a sufficient supply of natural gas to meet the forecast needs of Australian gas consumers by controlling, if necessary, LNG exports.”
The imposition of a gas price cap and the proposal that the government has a say in LNG export volumes could be challenged by foreign investors, global law firm White & Case warned in February.
“The imposition of such measures is not without risk for Australia, which is a signatory to several investment treaties where key LNG companies are incorporated,” White & Case says.
Mexico seeks to rehabilitate 36 gas pipelines
Mexico’s gas network operator Cenagas will carry out more than 20 pre-investment studies to determine the feasibility of a rehabilitation program for 36 gas pipelines in the northeast, southeast and center.
Rehabilitating the 9,000km network is crucial because it is outdated and at risk of creaking, Cenagas said in funding requests to the finance ministry, which approved 52.4mn pesos (US$2.9mn) to start the studies.
The program will also help meet the demand forecast for 2030. According to Cenagas, demand will jump from 1.9Bf3/d (billion cubic feet per day) to 2.9Bf3/d.
Structural failures at the “high-risk critical sections” may also cause “a reduction of the current existing supply of natural gas that is currently available, reflecting a social, ecological and economic impact,” it said.
Most of the high-risk stretches are in Veracruz state, but also in Tamaulipas, Coahuila, Mexico state, Nuevo León and Tlaxcala.
Part of the pre-investment studies are engineering studies, designs and work calendars.
Cenagas also said the studies are related to the plan to build a 3.6bn-peso gas pipeline to replace the one that crosses Tamaulipas state capital Reynosa.
On April 13, Cenagas awarded a 3.8mn-peso feasibility study, including for a new 56km line bypassing the urban area amid safety concerns, to BH&A, Proyectos, Consultoría y Supervisión de Infraestructura. Contract signing is planned for April 28, after which the company has 112 days to complete the study.
Nigeria completes gas pipeline without chinese funds
The Nigerian National Petroleum Corporation (NNPC) has used around $1.1 billion of its own funds so far and has completed work on 70% of a large natural gas pipeline in Nigeria even after a Chinese loan for the project failed to materialize.
Nigeria’s federal government announced in July 2020 that the Bank of China and Sinosure had agreed to finance part of the costs for constructing the Ajaokuta-Kaduna-Kano (AKK) gas pipeline to the economic hub in the north, Kano. In the summer of 2021, reports started swirling that Chinese lenders were reluctant to increase their exposure and finance part of the gas pipeline project estimated to cost $2.8 billion.
Nigeria has started to look for alternative funding for at least US$1 billion of the pipeline’s cost and has started to approach other lenders, including export-import credit institutions, sources told Reuters two years ago.
This week, NNPC Group chief executive, Mele Kyari, said on a site inspection that the AKK Gas Pipeline project was nearly 70% completed, and more than $1.1 billion has been released so far to finance the project. The pipeline is planned to run for 614 kilometers (382 miles) and is currently being financed by NNPC.
The AKK Gas Pipeline line will flow 2 Bscf/d and will power industries and power plants and create gas-based industries, Kyari said. By the third quarter of this year, NNPC will complete the entire welding job on this line, he said while visiting a construction site along the pipeline’s route.
“We have so far spent over $1.1 billion on this project from our cashflow,” NNPC’s Kyari said.
“We are a commercial company today. We have inter-company loans within our company now. This company can fund this project, so we do not need any support to deliver this project now.”
Turkey: $1 billion worth of gas found in Turkish gabar: Erdogan
(MENAFN- Trend News Agency) Türkiye discovered natural gas reserves valued at $1 billion in the southeastern Gabar mountain, President Recep Tayyip Erdogan said on April 23, trend reports citing hurriyet daily news .
“We discovered $1 billion of natural gas in Gabar, and we will extract it as well,” he said at the opening ceremony of Akyazı Recep Tayyip Erdogan Sports Complex.
He recalled that Türkiye commissioned its first multi-purpose Amphibious Assault Ship TCG Anadolu recently, and subsequently launched the country’s first delivery from a Black Sea gas reserve.
Türkiye will build an aircraft carrier twice the size of TCG Anadolu he stated, adding that they would display the vessel in Izmir in the coming days.“Hopefully, if you give us this task on May 14, we held preliminary talks with certain countries for the ship, which is twice the size of this vessel,” he said.
“It would be beneficial for it to stay in İzmir for the last one week-10 days. Hopefully, we will send different messages from there with TCG Anadolu. Seventy to 80 thousand people, who visited our ship, gave the good answer to the table of seven,” he said referring to the opposition parties.
“I wish that all natural gas consumption in the houses for one month and the consumption of kitchen and hot water for one year free of charge will be beneficial for our nation once again. My Lord has blessed us, and we are placing the Black Sea gas at the disposal of our nation,” he said.
The government is establishing the mothers, young people, family and youth bank, he said and added,“With this bank, which will take its source from the natural riches of our country such as the Black Sea, we will provide the financing of many studies from here.”
He reminded that Norway uses a certain proportion of its own natural gas and oil and dedicates it to its youth.
“We will do the same in our country. We will support the retirement of our housewives. We will expand scholarship opportunities at all levels of education. We will facilitate the employment of our youth by ensuring that at least one person from each household is employed,” he stated.
Citing the period before the rule of his Justice and Development Party (AKP), Erdogan said Türkiye has developed far beyond 1999 and is now“healing” the wounds of the Feb. 6 earthquakes faster.
“We will completely revive our earthquake cities by building 650,000 new houses. We are carrying out comprehensive urban transformation projects to prepare our whole country for earthquakes,” he explained.
Criticizing the Nation Alliance presidential candidate Kemal Kılıçdaroglu, Erdogan said the opposition Republican People’s Party (CHP) leader pledged to“release” the former co-chair of Peoples’ Democratic Party (HDP) Selahattin Demirtaş and leader of illegal PKK group Abdullah Öcalan from prison.
“He was going to take out Selo, who killed 51 of our citizens in Diyarbakır, and he would take out the terrorist leader Öcalan. This country is not a terrorist state,” Erdoğan said.
Global LNG Development
Canada: Kitimat LNG project hits another milestone
The LNG Canada project in Kitimat has reached a new milestone with the installation of its first bridge module.
The module’s primary function is to connect utilities to LNG processing train 1, and it also supports the transportation of LNG from train 1 to the storage tank.
JGC Fluor Joint Venture (JFJV), the prime contractor of the LNG Canada project, said the installation is significant, describing the project as “a culmination of many years of planning and collaboration between JGC and Fluor engineering teams, bringing together elements from separate fabrication yards using single weld hook-ups in a dramatically different environment from where they were built.”
To remind, in 2018, the JV partners in LNG Canada took a final investment decision (FID) and said the development of the project will cost about $14 billion.
When completed, the facility is expected to consist of a natural gas receiving and LNG production unit, a marine terminal with the capacity to accommodate two LNG carriers, a tugboat dock, and LNG loading lines. It will also include LNG processing units, storage tanks, a rail yard, a water treatment facility, and flare stacks.
China: PetroChina signs LNG deal with Malaysia’s Petronas
PetroChina International Co Ltd said it has signed a sales and purchase agreement with Malaysia’s Petronas to buy liquefied natural gas (LNG).
The deal, signed on April 17, is the pair’s first medium-to-long-term LNG sales and purchase agreement, PetroChina said in a statement on Tuesday without providing further deal details.
Petronas did not immediately respond to a request for comment.
China was the world’s top LNG importer in 2021, shipping in 78.8 million tonnes of the super-chilled fuel. It was overtaken by Japan last year amid high spot prices and after stringent COVID-19 containment measures curbed economic activity and energy demand, with imports slipping to 63.4 million tonnes.
An executive at PetroChina Co Ltd 601857.SS, 0857.HK, the listed arm of state-run China National Petroleum Corp and China’s biggest gas importer, in March said China’s natural gas demand is likely to grow this year as the economy recovers, but that any import rebound would be dependent on spot prices.
Congo: ENI inaugurates Congo LNG project in the Republic of the Congo
The President of the Republic of the Congo, Denis Sassou Nguesso, and the Chief Executive Officer of ENI, Claudio Descalzi, today laid the foundation stone of Congo LNG, the country’s first natural gas liquefaction project and one of Eni’s core supply diversification initiatives.
The project is expected to reach an overall liquefied natural gas (LNG) production capacity of 3 million tons per year (approximately 4.5 billion cubic meters/year) from 2025.
Congo LNG will exploit the huge gas resources of Marine XII, fulfilling the country’s power generation needs while also fuelling LNG exports, supplying new volumes of gas to international markets focusing on Europe.
The project, made though an accelerated development schedule and a zero-flaring approach, will see the installation of two floating natural gas liquefaction plants (FLNG) at the Nenè and Litchendjili fields – already in production – and at the fields yet to be developed. The first FLNG plant, currently under conversion and with a capacity of 0.6 million tonnes per year (MTPA), will begin production in 2023. The second FLNG plant – already under construction – will become operative in 2025 with a capacity of 2.4 MTPA.
Claudio Descalzi, Eni’s Chief Executive Officer, commented: “Today we celebrate the launch of one of Eni’s main projects, made possible by the collaboration with the Republic of the Congo and destined to significantly contribute to both Italy and Europe’s energy security and industrial competitiveness. This outcome speaks to the importance of long-term collaboration with our African partners at a time when important strategic choices need to be made in regards to future diversification of supply routes and European energy mixes, in the direction of energy accessibility and availability and progressive decarbonisation.”
Eni has been operating in Congo for over 50 years and – to date – is the only company active in the development of its gas resources, guaranteeing 70% of national electricity production through the Centrale Electrique du Congo (CEC).
Eni is strongly committed to promoting energy transition in the country. Recently, the Oyo Center of Excellence for Renewable Energy and Energy Efficiency was handed over to the Ministry of Higher Education, Scientific Research and Technological Innovation of the Republic of the Congo, which will manage it together with UNIDO (United Nations Industrial Development Organization). Furthermore, the company is developing agri-feedstock production initiatives destined for biorefining and not in competition with the food supply chain.
Azerbaijan agrees to boost gas transfers via four EU countries
Four European Union nations signed a deal with Azerbaijan Monday for broader gas distribution to the bloc, with the Eurasian partner targeting to raise gas supply to Europe to 423.78 billion cubic feet (12 billion cubic meters) this year.
The memorandum of understanding (MOU) for the so-called Solidarity Ring initiative paves the way for gas transfers from the State Oil Company of the Azerbaijan Republic (SOCAR) via existing infrastructure, separate press releases from parties to the agreement said. Supplies would be delivered by pipeline networks of Bulgaria’s state-owned Bulgartransgaz EAD, Hungary’s FGSZ Ltd., Romania’s state-owned Transgaz SA and Slovakia’s Eustream, also government-controlled.
The agreement inked during a meeting between Azerbaijan President Ilham Aliyev and his Bulgarian counterpart Rumen Radev follows a 2022 pact between the 27-member bloc and Baku for increased oil and gas shipments to the EU. The Memorandum of Understanding on a Strategic Partnership in the Field of Energy passed July 18, 2022 includes a commitment to double the capacity of the Southern Gas Corridor to at least 706.29 billion cubic feet (20 billion cubic meters) in yearly transfers to the EU by 2027, according to a European Commission announcement of the deal.
“The MoU signed today, when implemented, will definitely strengthen energy security in Europe, and allow Azerbaijan to export more gas to many more European countries”, Aliyev told the signing ceremony in Bulgaria, according to a transcript on the Azerbaijan presidential website.
“In 2021, we delivered 8 billion cubic meters to Europe. And this year, our target is 12”, he added. “So, that will be almost half of our total export, which we plan for this year at the level of 24.5 billion cubic meters”.
Azerbaijan plans to deliver its first gas exports to Hungary and Slovakia this year “if all necessary interconnectors are in place”, the president said, noting in Europe his country already supplies Bulgaria, Georgia, Greece, Italy and Türkiye.
Azerbaijan’s gas export to Romania has also started this year, he said. SOCAR and state-owned Romgaz SA finalized February an agreement proposed last year for the transport of up to 35.31 billion cubic feet (one billion cubic meters) of natural gas to Romania.
Aliyev also said: “We are in the process of negotiations with Albania to build a local gas distribution system, because the Southern Gas Corridor crosses Albania’s territory”.
Tuesday’s deal comes as the EU looks to wean itself off reliance on Russian energy in response to its invasion of Ukraine. Russia was the EU’s top source of natural gas and petroleum from 2010 to 2020. It comprised 38.2 percent of the bloc’s imports of natural and liquefied natural gas and 25.7 percent of the EU’s imports of crude oil in 2020, according to the latest energy imports percentage statistics by EU agency Eurostat published April 13.
The EU’s natural gas production has also continued dropping, by 7.6 % to 1,755,874 terajoules in 2021 against 2020, according to the latest Eurostat update. Meanwhile inland demand rose 4.3 percent the same period to reach 15,834,900 terajoules, the EU statistics agency reported April 13.
“Especially at a time when our partners need a reliable gas supply, solidarity and cooperation are fundamental”, Radev told the ceremony, according to a President.az transcript. “The war in Ukraine has made us look for new dimensions of the concepts of good neighborliness, solidarity and cooperation. This basically requires us to look for new solutions, new routes and supplies to be able to make changes to the international logistics map”.
Romania Energy Minister Virgil-Daniel Popescu called for the agreement to expand to include Moldova, Türkiye and Ukraine, according to Azerbaijan’s Trend News Agency. “It is necessary to start work immediately after signing the memorandum. The door should be open for Türkiye, Moldova, and Ukraine”, he was quoted as saying.
Tuesday’s deal, which “sets out directions of cooperation” between SOCAR and the four gas distributors, was signed by Azerbaijan’s energy minister and cabinet representatives of the four EU states, the Azerbaijan presidential office said announcing the signing.
Finland’s Inkoo FSRU gets new LNG cargo
Finland’s first FSRU-based facility in the port of Inkoo has received a new cargo of liquefied natural gas (LNG), according to Gasgrid.
The 155,000-cbm LNG carrier Solaris delivered a full LNG cargo to Excelerate Energy’s 150,900-cbm FSRU Exemplar, which serves Gasgrid’s import facility in Inkoo under a charter deal, Gasgrid said in a statement on April 21.
Gasgrid said the loading went as planned and the gas supplies were fed into the gas network for use by industry, energy production, as well as households.
The state-owned natural gas transmission system operator did not provide any additional details regarding the shipment.
According to its AIS data provided by VesselsValue, the 2014-built Solaris, owned by GasLog Partners, delivered the shipment to Inkoo from Cheniere’s Corpus Christi LNG terminal in the US.
This delivery follows the first commercial LNG shipment for the new FSRU-based facility in Finland.
Eesti Gas, a unit of Estonian investment firm Infortar, recently received the first LNG cargo from the US via Finland’s FSRU-based LNG terminal.
Also, the Tallinn-based firm, which is branded internationally as Elenger, purchased the cargo from energy trader Vitol.
It will bring in total seven shipments via the Inkoo FSRU in spring and summer this year.
1-2 vessels per month
Gasgrid said in the statement it expects 1-2 vessels per month to arrive at the FSRU-based facility in Inkoo.
So far, the facility, operated by its unit Floating LNG Terminal Finland, has already delivered the equivalent of an entire LNG ship (1,000 GWh) of gas to the transmission network, it said.
Satu Mattila, CEO of FLTF, said in the statement that almost the entire capacity of the current gas year has been booked.
“All the spring and summer slots in the terminal have been reserved, and one slot in August and one in September can still be booked,” she said.
Gasgrid recently received approval to start offering reloading services at the FSRU-based facility in the port of Inkoo to boost the terminal’s utilization rate.
FLTF is offering in total 35 terminal slots of 1,000 GWh each for the period from October 1, 2023 to September 30, 2024.
Excelerate Energy’s FSRU Exemplar has a regasification capacity of more than 5 billion cubic meters per year and started supplying regasified LNG to the grid on December 29 as part of the commissioning phase.
After that, Gasgrid said in January that that the FSRU-based facility, which connects to a 2.2 km long gas transmission pipeline, was ready to start commercial operations.
Last month, the state-owned firm reduced the number of planned LNG import slots for the April-September period due to “limitation of transmission capacity in Balticconnector and expected market demand.”
Qatar records 22 more LNG cargoes in first quarter than Q1, 2022: GECF
Qatar delivered 22 more cargoes in the first quarter of this year compared to the same period last year, the Gas Exporting Countries Forum (GECF) said in its April report.
In March, the total number of global LNG export cargoes increased by 8% m-o-m to 551. The total number of LNG shipments for the first three months of 2023 reached 1598, which is 3% (or 50 more cargoes) than during the same period in 2022.
The US, Australia, and Qatar lead the number of LNG shipments in 2023 thus far, Doha-headquartered GECF noted.
In March 2023, the LNG spot charter rate for steam turbine carriers averaged $38,800 per day, which was 12% higher month-on-month (m-o-m) and 50% higher year-on-year (y-o-y).
The spot charter rate in 2023 has generally been following the seasonal trend, hovering around the five-year average.
During the majority of March, charter rates held steady at the same levels as the end of February, until they declined during the final third of the month.
This, GECF noted that although the average monthly rate increased m-o-m, March concluded with the daily rate actually reaching the lowest level recorded since August 2022.
Charter rates softened at the end of the month as a result of reduced tightness in the market, attributed to increased Atlantic Basin deliveries, rather than intra-basin flows.
The average price of the leading shipping fuels in March 2023 was $560 per tonne, which was 8% lower than the previous month, and 37% lower y-o-y.
In March 2023, the impact of the rise in LNG spot charter rates was offset by decreases in the cost of LNG shipping fuels and the delivered spot LNG prices, resulting in a net decrease in the
LNG shipping cost, by up to $0.12/mmBtu compared with the previous month, GECF said.
Compared with the same month one year ago, charter rates were higher in March 2023, but fuel prices and delivered spot LNG prices were significantly lower than in 2022, resulting in LNG shipping costs up to $1.32/mmBtu lower.
Maintenance activity at LNG liquefaction facilities: In March, both planned and unplanned outages affected 0.80 mtpy of global liquefaction capacity. This represents a significant decrease from 2.07mn tonnes per year (mtpy) in March 2022.
The APLNG facility in Australia and Qatar’s LNG facility underwent planned maintenance activity during the month, while the Soyo LNG facility in Angola, QCLNG facility in Australia and Freeport LNG facility in the US encountered unplanned outages, GECF said.
Hongkong: CLP Power and HK Electric to develop offshore LNG terminal
An offshore LNG terminal is being jointly developed by CLP Power Hong Kong Limited and The Hongkong Electric Co., Ltd (HK Electric) to support Hong Kong’s energy transition. A FSRU vessel, which will be used to receive, store, and regasify LNG, arrived in Hong Kong 13 April 2023 and is staying at the South Cheung Chau Anchorage.
When checks and port clearance procedures are completed, the FSRU vessel will sail to the offshore LNG terminal east of the Soko Islands next week for the final commissioning of the project.
The offshore LNG terminal, constructed by CLP Power and HK Electric, is the first of its kind in Hong Kong and will be operated by the Hong Kong LNG Terminal Limited, a joint venture between the two power companies. Construction of a marine jetty and two subsea gas pipelines of the terminal has been completed. Commissioning of equipment is under way and the terminal is scheduled for operation in mid-2023.
The FSRU vessel, which will be named Bauhinia Spirit, is the world’s largest with an overall length of 345 m and a storage capacity of 263 000 m3 of LNG. It will be moored at the jetty of the offshore LNG terminal and be used to receive, store, and regasify LNG.
When it goes into operation, the LNG terminal will further improve the stability of Hong Kong’s natural gas supply by diversifying supply sources, allowing Hong Kong to procure natural gas at competitive prices from the global market.
Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
Keppel plans to ship hydrogen from Australia to run a floating data center park in Singapore
Hundreds of tons of liquid hydrogen could be shipped each day from Woodside’s giant H2Perth facility
Keppel Corporation is planning to ship massive amounts of liquid hydrogen from Australia to power its data centers in Singapore.
The data center operator has signed an agreement with Australia’s Woodside Energy which could result in up to 1,000 tonnes (1,100 tons) of liquid hydrogen being shipped in tankers to Singapore, from Woodside’s facilities, which include a giant hydrogen plant known as H2Perth.
The hydrogen would be used to power a proposed floating data center campus known as Datapark+, which has just received regulatory approval.
There is a huge demand for data centers in Singapore, as it functions as a hub for Southeast Asia, but development has been severely restricted by the government since the sector has massive demands for energy and land. Data centers are already using around seven percent of Singapore’s electricity supply, and a major expansion would jeopardize any plans to decarbonize, since the island city-state’s grid is almost entirely reliant on fossil fuel as an energy source.
Singapore imposed a moratorium on new data center projects in 2019, which was officially lifted at the beginning of 2022. Since then, the government has invited new applications to build data centers, within a strict total limit to the capacity available. Operators including SGTech have criticized the cap on new data center builds.
In response, Keppel took part in a study with Woodside, beginning in December 2022, exploring the possibility of a hydrogen supply chain from Australia to Singapore. Osaka Gas also joined the study to investigate the possibility of extending the hydrogen shipping route to Japan, which also has a high demand for data centers and a very limited green energy capacity.
Australia, with its large land mass, has great potential to produce renewable energy from solar and wind, and Woodside proposes to convert this energy into hydrogen which can be shipped in liquid form to other parts of the world.
The government of Western Australia is supporting Woodside’s proposal for H2Perth, a hydrogen electrolysis plant to be built on 130 hectares of vacant industrial in the Kwinana Strategic Industrial Area and Rockingham Industry Zone, in south metropolitan Perth. The site aims to provide low-cost green hydrogen to local consumers and boost renewable power generation by providing a stable demand.
H2Perth also hopes to export around 1,500 tonnes per day of hydrogen – with Keppel potentially taking the lion’s share.
The biggest potential issue raised over the plan has been the high demand for water, which is electrolyzed to produce hydrogen and oxygen. Electrolysis needs clean water, which will also be in demand owing to climate change. Seawater can be desalinated, although this is an energy-intensive process.
In the non-binding “heads of agreement”, Woodside agrees to potentially supply around 1000 tonnes per day of liquid hydrogen to Keppel by 2030, the year in which the two parties expect the technologies to be in place for the supply chain
Keppel says the hydrogen would be used for Datapark+, the new name for the floating data center campus it has been developing for more than three years.
The Datapark+ name was revealed in a briefing released for Keppel’s annual general meeting, in which Keppel said: “We have received approval from the regulatory authorities to proceed, and are currently in negotiations with the site owner for project deployment.”
The company added: “We are also exploring the development of Datapark+, a nearshore data center campus project envisioned to be scalable, state-of-the-art, and low-carbon, bringing together the Group’s diverse expertise in developing and operating data centers as well as clean energy and infrastructure solutions.”
Previously, Keppel signed an agreement with Toll Group, an Australian subsidiary of Japan Post Holdings, to build the proposed floating data center park, and announced a location for it – Toll Group’s Loyang Offshore Supply Base.
The company has also signed an agreement with Royal Lopaz for liquid natural gas, as well as a separate agreement with City Gas and City-OG Gas Energy Services to potentially supply LNG and hydrogen power for the floating campus.
Woodside Executive Vice President of New Energy Shaun Gregory said: “Liquefying hydrogen provides the opportunity to export energy that can contribute to the decarbonization goals of customers and provide an economic and trade opportunity that supports the Singapore-Australia Green Economy Agreement.”
Keppel Data Centres CEO Wong Wai Meng CEO said: “We are investing to create a sustainable future for data centers through innovative lower-carbon solutions. Access to a stable supply of hydrogen to power our data centers in Singapore will accelerate our decarbonization efforts as we transition towards net zero emissions.”
Ohmium to provide 52 tonnes of green hydrogen for Spanish LNG terminal project, secures $250m in fundraising round
Ohmium International has announced plans to supply its electrolysers to a Spanish LNG terminal to cut emissions and secured $250m in a fundraising round.
The US electrolyser manufacturer has said it will supply its PEM technology to Efficiency for LNG Applications (E4Efficiency) for its project to decarbonise its terminal in southern Spain.
Dubbed the Huelva project, it will see up to 52 tonnes of green hydrogen annually to replace methane used in a gas flare pilot flame at the Huelva Liquefied Natural Gas (LNG) regasification terminal in Andalusia.
Hoped to mitigate up to 343 tonnes of annual carbon dioxide emissions, the project has received backing from the European Regional Development Fund (ERDF) and Spain’s Institute for Energy Diversification and Saving (IDAE).
“E4Efficiency is an innovator when it comes to the deployment of clean technology so we’re thrilled that Ohmium’s cutting-edge PEM electrolysers have been chosen to produce green hydrogen that will directly replace natural gas use on-site at the LNG terminal,” said Arne Ballantine, CEO of Ohmium International.
The Ohmium CEO continued to say that the company is helping to accelerate the deployment of green hydrogen across the EU, supporting its goals of reducing carbon emissions by at least 55% by 2030, adding, “We are looking forward to collaborating with companies across the EU and beyond to realise the potential of green hydrogen.”
Just last month (March 22), the company announced two new European hires in the form of Igor Nus, Vice President of Sales and Business Development; and Melchor Gamarro, General Manger, Spain and Business Director Southern Europe, to help accelerate business growth across Europe
In November last year (2022), Ohmium revealed it would supply 120MW of its PEM electrolysers to NovoHydrogen to see hydrogen used as a zero-carbon fuel replacement for a portion of gas usage at a peaking power plant in New Jersey, US. Ohmium has announced the close of a $250m Series C growth equity financing, which was led by TPG Rise Climate, the climate investing strategy of TPG’s global impact investing platform TPG Rise, and also included participation from Hanover Technology Investment Management and existing investors Energy Transition Ventures and Fenice Investment Group.
The funding will be used to support Ohmium’s expansion to 2GW in annual manufacturing capacity and the deployment of projects for the company’s growing global customer pipeline in key regions including the US, Europe, India and the Middle East. The investment will also provide significant capital to scale Ohmium’s business, including accelerating its pioneering research and development programs to reduce the cost of green hydrogen production.
Ahmad Chatila, Chairman and founding investor of Ohmium and Managing Partner of Fenice Investment Group, said, “Green hydrogen is critical to the rapid decarbonisation of hard-to-abate sectors. Ohmium is uniquely positioned to be a leading provider of emissions-free hydrogen technology given its customer-focused, modular solution that enables businesses to achieve an extremely competitive levelised cost of hydrogen (LCOH).”
Hydrogen, the ultimate clean energy: from demonstration projects to networked station development
According to the International Energy Agency, the transport sector accounts for approximately 23% of global CO2 emissions, a figure likely to grow 20% by 2050. To achieve the objectives of the Paris Agreement and limit global warming to a 2°C increase, the sector’s CO2 emissions must fall by 90% by 2050.
Hydrogen is a low-carbon alternative energy that can significantly reduce transport-related air pollution. Its sole byproduct is water. It limits pollutants and CO2 emissions, and allows for silent, rapid refuelling, making it suitable for long-distance trips. Hydrogen powers fuel-cell vehicles, now in use in a growing number of sectors. It also has advantages for heavy and light mobility, captive fleets such as taxis, maritime transport and railways.
In 2022, as geopolitical events triggered a steep rise in energy prices, particularly natural gas, hydrogen demonstration projects proliferated. The number of countries working on hydrogen-refuelling stations continues to grow. By 2030, the European Union aims to have one station every 200 kilometres along its entire road network. Hydrogen power has the potential to address environmental concerns and provide clean energy into the future.
Hydrogen: the alternative energy for the transport sector
The ‘chicken-and-egg’ paradox has long constrained the development of the European hydrogen sector. With few hydrogen-powered vehicles on the market, few refuelling stations are needed. Yet precisely this lack of stations forms an obstacle for the development of hydrogen-powered fleets.
That situation is now changing – for the better. France, for example, was home to 400 hydrogen-powered vehicles and 29 hydrogen stations in 2022. By 2030 the country is expected to have 450,000 vehicles and 1,000 to 1,700 hydrogen stations. The recent launch of the European Hydrogen Bank (EHB) to boost development in the sector may put an end to the chicken-and-egg situation once and for all.
With the costs of hydrogen production measuring up well against traditional fuel-production costs, more and more companies are turning to this environmentally friendly solution to decrease their CO2 emissions. As costs shrink further still thanks to production through wind and solar power, hydrogen is becoming an increasingly attractive option, especially for heavy and long-range transport.
Hydrogen subsidies and investments for the future
The energy crisis has accelerated the search for alternative and renewable energies. In September 2022, the European Union unveiled REPowerEU: a €3 billion investment plan to finance and scale up hydrogen projects in the bloc. The new European Hydrogen Bank will roll out an initial investment of over €800 million in renewable hydrogen production, with plans to increase this amount in the near future. In March 2023, the EU identified 26 alternative energy projects to receive in excess of €188 million in development funding. Of these projects, 10 will establish hydrogen-refuelling stations in countries such as France, Spain and Sweden. By 2050, hydrogen-related investments are set to surpass a dozen trillion euros. This will demand a great deal of cooperation between the many players involved in R&D, projects and agreements.
The year 2050 may feel distant. These initiatives show, however, that many different players are committed to developing this alternative energy with an eye to the future.
The potential of hydrogen: cross-energy applications
Hydrogen is a viable source of energy for heavy-duty vehicles, especially over long distances. The production process results in zero CO2 emissions, unlike that for petrol and diesel vehicles. Refuelling times are almost equivalent, however, and hydrogen-powered vehicles can drive thousands of kilometres before requiring refilling, giving them an edge over electric trucks. Moreover, electric vehicles need to account for the size and weight of their batteries, while hydrogen-powered lorries can carry the same load as traditional fuel trucks.