Shell and Baker Hughes Huddle Up To Meet Decarbonization Targets

The supermajor and service company that have long been partners on oil and gas projects said they are exploring new models to fit the energy transition. They also separately announced this week new plans to expand into the hydrogen market.

Source: Shell.

Renewable energy credits, liquefied natural gas (LNG), and decarbonization. These three things are to play central roles in a new agreement that Shell and Baker Hughes announced on Wednesday.

The Dutch supermajor and Houston-based service company, long-time partners on mostly oil and gas developments, said their “broader collaboration” will help both companies achieve a net-zero status by 2050.

Shell said it will kick the collaboration off by giving Baker Hughes power and renewable energy credits for selected sites in the US over the next 2 years. This move is expected to raise Baker Hughes’ total annual use of renewable energy from 22% to 24%.

The two companies will also negotiate for up to 100 GWh of renewable power for Baker Hughes’ facilities in Europe. In Singapore, the firms are considering building a solar power facility at a Baker Hughes chemical blending plant.

Other parts of the agreement are more open-ended but could see Shell supplying Baker Hughes with its line of lower-carbon transportation and fuel products.

At the same time, Shell is to review Baker Hughes’ catalog for technologies that might lower the carbon footprint of the supermajor’s LNG facilities. Shell said it will also consider using more of the service company’s software solutions to aid in its companywide decarbonization effort.

Shell and Baker Hughes added that they are seeking business opportunities that may include co-investing in new ventures and working together on “new models” to decarbonize the energy and industrial sectors.

Running Toward Hydrogen

In separate developments, both Shell and Baker Hughes also announced this week new investments in the hydrogen production sector.

Through its renewable and new energy investment arm, Shell and Norwegian aluminum and energy producer Norsk Hydro shared plans on 9 November to “explore the potential for joint projects producing hydrogen from renewable electricity.”

The focus of the Shell and Norsk Hydro agreement will be the potential use of renewable energy hubs already near their operations to generate green hydrogen. The aim is to use clean-burning fuel to meet their own operational demands and eventually scale up the supply to meet that of other European markets where green hydrogen could be used in heavy industry, maritime, and for road transport.

Baker Hughes’s latest foray into the hydrogen market was also announced 9 November and involves an investment in Vancouver, Canada-based Ekona Power. A release described Ekona as a “growth stage company” that has developed a turquoise hydrogen production system that employs methane pyrolysis to split, or crack, hydrogen molecules from the feedstock gas inside a reactor.

Key to Ekona’s technology is its ability to yield solid carbon from the methane, thus “drastically reducing carbon dioxide emissions versus the traditional and prevalent stream methane reforming process,” the companies said in a joint release.