The study is intended to help decarbonise the Kwinana Industrial Area – in addition to the refinery of the same name, the area is home to several high-emission power plants, mineral refineries, chemical plants and cement works, BP said.
The project, BP said, would also determine whether there was sufficient industrial demand among consumers and investors for constructing a large-scale electrolyser to produce green hydrogen in Kwinana based on renewable energy sources.
BP announced it was shutting the refinery in October 2020, citing low refining margins and regional oversupply in East Asia and the Middle East. The plan called for construction of a terminal for oil imports at the site by 2022, with the possibility of redploying 60 of the 650 laid off staff. Now plans are being considered to use the site also for producing green hydrogen.
BP had already announced in August what it said were the multiple advantages of “clean energy production” in Western Australia, citing research conducted by the Australian Renewable Energy Agency (ARENA), the engineering consultants GHD Advisory and its own affiliate Lightsource BP, which has developed technologies for solar energy:
- With the benefit of vast potential solar and wind resources, Western Australia is suited to commercial production of not only green hydrogen but also green ammonia, produced by combining green hydrogen with nitrogen.
- A pilot capacity of BP’s new production was estimated at 4,000 tonnes of green hydrogen and 20,000 tonnes of green ammonia per year and once the project achieves full capacity – 200,000 tonnes of green hydrogen and 1 million tonnes of green ammonium.
- The project will require considerable investment in transport and electric power, but thanks largely to the favourable starting conditions in Western Australia, operational costs can be reduced (to less than $2 per kg) – and that will allow the region to become a regional large-scale hydrogen export hub.
If construction and bringing the plant on stream proves successful, Kuniane will not be the sole hydrogen project in Western Australia. In 2019, with the aim of developing the sector, the state government created a special fund of $A 15 (A little more than $11 million). One of the recipients was the company APA, which intends to re-equip the Parmelia gas pipeline running along Australia’s western coast, in order to use it for hydrogen.