Essar, which operates a downstream energy business in the UK, has joined hands with Progressive Energy, an industrial decarbonisation cluster, to produce low-carbon hydrogen at Essar’s Stanlow refinery.
The joint venture will manufacture hydrogen at the refinery for use across the HyNet region. It will provide Essar Oil UK with low-carbon hydrogen to decarbonise its own energy demand in addition to creating a hydrogen economy across North West England and North East Wales.
A total investment of about £750 million will be committed to deliver the two hydrogen production hubs. Follow-on capacity growth is planned to reach 80 per cent of the government’s new target of 5GW of low carbon hydrogen for power, transport, industry and homes by 2030.
The hub will initially produce 3 terawatt-hours (TWh) of low-carbon hydrogen each year from 2025. This will be followed by a facility twice this size giving a total capacity of over 9TWh of hydrogen per annum, equivalent to the energy used for heating across the whole of Liverpool.
The joint venture will convert natural gas and fuel gases from the refinery to low-carbon hydrogen, with carbon dioxide safely captured and stored offshore in sub-surface reservoirs in Liverpool Bay.
Stein Ivar Bye, Chief Executive Officer, Essar Oil UK, said with the support of government business incentives and joint venture with Progressive Energy, the company is committed to undertake the development and financing of its construction.
Essar Oil (UK) produces 16 per cent of UK road transport fuels and the refinery processes 10 million tonnes of crude and feedstocks annually. Since acquiring Stanlow in 2011, Essar has invested $1 billion in the Essar Oil UK business and increased annual throughput capacity from 68 million to 75 million barrels.