BP exits US$36 bn Australian green hydrogen project; to focus on upstream oil/gas
UK oil/gas major BP is pulling out of a planned massive green hydrogen production facility in Australia, Australian Renewable Energy Hub. BP currently has a 63.57% stake in the project. The other joint venture partners include privately owned InterContinental Energy and CWP Global.
BP’s entry into the US$36 billion project occurred when the company sought to build a business in low-carbon energy and shrink its oil business, but the company has since slashed planned spending on renewables as it refocusing investments to oil and gas after the stock’s underperformance.
“This decision reflects BP’s recent strategy reset, which will see BP grow its upstream oil and gas business, focus its downstream business, and invest with increasing discipline into the transition,” a spokesperson said in a media statement.
BP’s exit follows a series of high-profile cancellations of its hydrogen projects, including the shelved Whiting refinery blue hydrogen plans and the cancelled Hygreen Teeside project.
The Australian Renewable Energy Hub aims to develop up to 26 GW of solar and wind capacity to produce as much as 1.6 million tonnes/year of green hydrogen, making it one of the world’s largest renewable energy projects and a key project for industrial decarbonisation in Pilbara, Western Australia.
The project covered an area of more than 6,000 ha and was to combine some 14 GW of hydrogen electrolysers, powered by around 16 GW of wind turbines and another 10 GW of large scale solar.
BP is not the only company abandoning green hydrogen ambitions; with iron ore miner Fortescue also exiting plans for a US$550 million green hydrogen project in the US and a US$150 million project in Australia, as well as Woodside.
The rollout of green hydrogen, however, have been put on the backburner, largely because of the lack of strong demand and the struggle with costs, and the competition from competing technologies such as EVs, battery storage and electrification that has eliminated some of its anticipated markets.
