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BP signs MOUs with potential customers for its clean hydrogen production facility in UK

August 16/2021

MOSCOW (MRC) -- BP has announced that it has agreed Memoranda of Understanding (MoUs) with a series of new potential customers for its proposed clean hydrogen production facility in Teesside in north-east England, as per the company's press release.

In March, Bp announced plans for a clean hydrogen facility in Teesside (H2Teesside) that would aim to produce up to 1GW of blue hydrogen - 20% of the UKs hydrogen target - by 2030. At the same time, it announced it had signed initial MoUs to scope the supply of hydrogen to chemicals manufacturer Venator and gas distributor Northern Gas Networks.

Teesside has all the attributes of a world-class clean hydrogen hub - the right natural resources, concentrated demand, potential for hydrogen storage and pipelines, ample access to CCUS and the right skills base, said Louise Jacobsen Plutt, bps senior vice president of hydrogen and CCUS.

Bp has now signed MoUs with four further potential customers - with existing or planned new Teesside operations - for hydrogen produced by the project. These can support and accelerate the development of the Teesside hydrogen cluster and decarbonization of industrial users in the area. The new MoUs are with:

     - CF Fertilisers, one of the largest global producers of ammonia and ammonia-based fertilizers products, to scope the supply of clean hydrogen as fuel to reduce hard to abate combustion ?emissions at its Billingham plant, whereas feedstock sourced CO2 would be sequestered via the Northern Endurance Partnership project.
     - Mitsubishi Chemical Corporation, a leading global manufacturer of chemical products, to scope the supply of clean hydrogen to its methyl methacrylate production plant in Teesside (formerly operated as Lucite International).
     - Sembcorp Energy UK, owner and operator of utilities and services infrastructure at Wilton International, an industrial park in Teesside, to scope the supply of clean hydrogen to its combined heat and power plants and developing hydrogen infrastructure at Wilton International to enable hydrogen supply to third parties.

These companies are seeking to decarbonize existing operations in Teesside by switching fuel from natural gas to clean hydrogen, enabling their manufacturing facilities to produce low carbon products as society progresses towards a net zero future.

Finally, bp has executed an MoU with alfanar Company to scope the supply of clean hydrogen to alfanars waste-to-sustainable aviation fuel (SAF) plant, currently under development, in Teesside. alfanar Company represents the new project investments coming to Teesside, aiming to develop low carbon materials using clean hydrogen as a feedstock for production.

As MRC reported before, BP and Lukoil want to quit their Iraqi energy projects due to the current investment environment, the country's oil minister said earlier this month, as OPEC's second biggest producer faces an exodus of international oil companies that want to exit unattractive contracts. Lukoil wants to sell its stake in West Qurna 2 to Chinese companies.

We remind that Russian energy major Lukoil (Moscow) is studying several potential petrochemical projects in Russia and Bulgaria, with investment decisions expected to be made on two of them in 2021.

Thus, Lukoil announced an investment decision in June, 2019, to proceed with a 500,000-metric tons/year polypropylene (PP) plant at its Kstovo refinery. In September this year it selected Lummus Technologys Novolen PP technology and basic design engineering for the facilitys production unit. Kstovo is one of Lukoils largest crude refineries in Russia with a throughput of 17 million metric tons/year, with the company recently adding a catalytic cracking unit that almost doubled the refinerys production of propylene feedstock to 300,000 metric tons/year.

At Budennovsk in Russias far south west, the companys Stavrolen petchems complex currently has the capacity to produce 350,000 metric tons/year of ethylene, 300,000 metric tons of polyethylene (PE), 120,000 metric tons/year of PP, and 80,000 metric tons of benzene. Lukoil has for several years been considering construction of a new gas chemicals plant at Stavrolen to crack more ethane extracted from associated petroleum gas produced by its oil and gas fields in the north of the Caspian Sea. The potential new plant would raise Stavrolens ethylene and PE output to around 600,000 metric tons/year each, and increase PP production to 200,000 metric tons/year.

Ethylene and propylene are the main feedstocks for the production of PE and PP, respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

BP is one of the world's largest oil and gas companies, serving millions of customers every day in around 80 countries, and employing around 85,000 people. BPs business segments are Upstream (oil and gas exploration & production), and Downstream (refining & marketing). Through these activities, BP provides fuel for transportation; energy for heat and light; services for motorists; and petrochemicals products for plastics, textiles and food packaging. It has strong positions in many of the world's hydrocarbon basins and strong market positions in key economies.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, gas processing, petrochemistry, BP Plc, Mitsubishi Chemical, Lukoil, Bulgaria, UK, Iraq, Russia.
Category:General News
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