Energy transition

Tracking the Energy Transition: CCS and Newbuild Ships, the Rise of Hydrogen Projects, EV Manufacturing Stateside, and the Smell of Fuel Conversion Success

Sempra lands partners for a CCS deal in Louisiana, while Shell eyes newbuild ships for CCS transport. An offshore alliance targets floating wind technology, and global hydrogen projects gain momentum in the UAE, Africa, and Brazil.

Cameron LNG Phase 1 and proposed Phase 2 export projects would potentially serve as the anchor source for the capture and sequestration of carbon dioxide by the announced Hackberry Carbon Sequestration project.

Sempra Infrastructure, a subsidiary of Sempra Energy, signed a participation agreement with TotalEnergies, Mitsui, and Mitsubishi Corp. for the development of the proposed Hackberry Carbon Sequestration (HCS) project in southwest Louisiana.

Sempra’s combined Cameron LNG Phase 1 and proposed Phase 2 export projects would potentially serve as the anchor source for the capture and sequestration of carbon dioxide (CO2) by the project. It also provides the basis for the parties to enter a joint venture with Sempra Infrastructure for the HCS project.

"We are excited to advance the development of the Hackberry Carbon Sequestration project, the first of Sempra Infrastructure's net zero solutions projects, to help Cameron LNG produce cleaner liquefied natural gas for its customers," said Justin Bird, chief executive of Sempra Infrastructure. "This project is expected to be among the first North American carbon capture facilities designed to receive and store CO2 from multiple sources, and our goal is for this facility to set the gold standard for safe and permanent CO2 storage."

Last year, the HCS project filed an application for a Class VI Injection well permit from the US Environmental Protection Agency for permanent storage of up to 2 mtpa of CO2.

Equinor, Others Look to the Sea
In a bid to expand CCS transportation, Shell is set to build ships that can carry more CO2 over longer distances as part of the company's plans to expand its carbon capture and storage (CCS) business globally.

Shell’s joint venture with Equinor and TotalEnergies will build two ships capable of delivering 7,500 m3 of CO2 as part of the Northern Lights project in Norway.

The ability to move huge volumes of CO2 from industrial sites to offshore CCS hubs is important for these projects to achieve economies of scale and decarbonize heavy sectors like refining, cement, and steel.

Shell will oversee the vessel’s design and construction, which will be fueled by LNG. Construction will begin in the third quarter of this year, and both ships will be delivered in 2024.

Pledging its support for low-emissions shipping further, Equinor has joined the Mærsk Mc-Kinney Møller Center for Zero-Carbon Shipping as a strategic partner, committing to a long-term strategic collaboration and contribution to the development of zero-carbon technologies and solutions for the maritime industry.

The operator brings extensive experience in large-scale production and transport of maritime fuels and will contribute expertise in key areas like safety in operation and design, carbon capture storage design and operation, and renewable energy integration including floating wind technology.

Equinor is both a producer and a supplier of fuel to the maritime sector and has worked systematically on reducing its carbon intensity by developing new types of vessels and using alternative fuels.

With 100,000 ships consuming around 300 million metric tonnes of fuel per year, global shipping accounts for around 3% of global carbon emissions, a share that is likely to increase as other industries tackle climate emissions in the coming decades.

Achieving the long-term target of decarbonization requires new fuel types and a systemic change within the industry. Shipping is a globally regulated industry, which provides an opportunity to secure broad-based industry adoption of new technology and fuels.

The Norwegian operator also expanded its offshore wind toolkit via a partnership with Technip Energies. The duo has joined forces to develop floating wind steel semi-substructures to accelerate technology development for floating offshore wind and aim for cost reductions. By teaming up at an early design phase of a project, they seek to leverage their competencies in technology and fabrication.

Equinor believes that a large part of the growth in renewables needed for the energy transition will come from floating wind. The operator estimates 80% of the wind resources offshore are in deep waters that require a floating wind turbine solution.

The operator said the way to commercialization of floating wind lies with technological development together with suppliers. From building the world’s first floating turbine, Hywind Demo, to the world’s first floating wind farm, Hywind Scotland, Equinor reduced the cost per megawatt by 70%. With Hywind Tampen, which will be the world’s largest floating wind farm located off the coast of Norway, costs are further reduced by 40%.

Hydrogen Boosts for UAE, Africa, and Brazil
Hydrogen projects continue to spring up around the global as companies pump billions into new plants aimed to boost hydrogen production. Three South Korean companies have signed an agreement to build a $1-billion green hydrogen and ammonia production plant in the UAE.

Korea Electric Power, Samsung C&T Corp., and Korea Western Power, alongside the UAE's Petrolyn Chemie, will build a plant that can produce up to 200,000 tonnes of green ammonia a year, according to Petrolyn.

Both the UAE and Saudi Arabia have set out ambitious plans for hydrogen, amid a deepening economic rivalry between them.

The plant will be built in two phases in the KIZAD Industrial Area near Abu Dhabi, with the first phase producing 35,000 tonnes before the second phase takes the project to full scale.

Over land and across the Red Sea, South Africa, Namibia, and four other African countries formally launched the Africa Green Hydrogen Alliance in May, with the aim to make the continent a frontrunner in the race to develop green hydrogen, to accelerate the transition away from a reliance on fossil fuels, and to shift to new energy technologies that open access to clean, affordable energy supplies to all.

In forming the alliance, Kenya, South Africa, Namibia, Egypt, Morocco, and Mauritania intend to foster collaboration to supercharge green hydrogen development. It includes the development of public and regulatory policy, capacity building, financing, and certification needs to mobilize green hydrogen production for domestic use and export.

The alliance is now inviting more African countries to join, responding to the opportunities presented by lower-cost renewables, fast-developing electrolyzer technology, and signals in some major markets that green hydrogen demand is likely to emerge at scale this decade.

Several African countries are posited to be well-suited to develop green hydrogen industries, with strong solar and wind energy potential and large tranches of nonarable land.

South Africa’s goal to deploy 10 GW of electrolysis capacity in the Northern Cape and about 500,000 tonnes per year of hydrogen by 2030 is forecast to create 20,000 jobs yearly by then and 30,000 by 2040.

Namibia’s planned $9.4-billion green hydrogen project is expected to create 15,000 jobs during construction and 3,000 permanent positions—90% to be filled by Namibians.

Projects are also planned in Egypt, Mauritania, and Morocco.

Lastly, Shell and Brazil's Porto do Açu have agreed to jointly build a 10-MW green hydrogen plant in Brazil's Rio de Janeiro state. Açu, a major industrial complex and port, is owned by Prumo Logistic, which is in turn controlled by US private equity firm EIG Global Energy Partners.

The initial phase of the project is expected online in 3 years. Two subsequent, optional phases would bring production to 100 MW by 2029. The first phase alone will likely require up to $40 million in investment.

Part of the hydrogen will be stored and then sent to potential consumers; the remaining hydrogen is destined for the renewable ammonia generation plant.

Back in the US, Hyundai Motor Group has pledged a $5.5-billion investment in a smart electric vehicle (EV) factory to be built near the city of Savannah, Georgia. The factory would be Hyundai’s first dedicated EV and battery site in the US.

The factory will assemble EVs and batteries at a 2,923-acre site in Bryan County, south of the city. As well as the South Korean group’s contribution, other suppliers will invest $1 billion in the project.

The factory will take advantage of Hyundai’s research into manufacturing technologies, including intelligent AI-equipped robots.

Georgia Governor Brian Kemp said that the factory would be “the largest economic plan we have ever done in the state’s history”, creating 8,100 jobs.

Construction will begin in January 2023. When completed in the first half of 2025, the plant will be able to make 300,000 units a year.

The funding is part of Hyundai Motor’s pledge of a $7.4-billion investment in the US to raise green car sales by 50% and to have 3.2 million vehicles on the road around the world by 2030.

Big Oil Meets New Fuel
Meanwhile, with its eye fixed on diverse and low-carbon fuels, Chevron completed its previously announced acquisition of Renewable Energy Group (REG) following approval by REG stockholders. REG’s chief business is the conversion of renewable resources into high-quality, sustainable fuels.

“We have brought together companies with complementary capabilities, assets, and customer relationships to make Chevron one of the leading renewable fuels companies in the United States,” said Mark Nelson, executive vice president of downstream and chemicals for Chevron. “Chevron now offers our customers an expanded suite of cost-effective, lower carbon solutions that utilize today’s fleets and infrastructure.”

Cynthia Warner, formerly president and chief executive of REG, has been appointed to Chevron’s board of directors with immediate effect.

Smells Like Progress
Across the heartland to Wisconsin, Black & Veatch has partnered with Amp Americas to develop an engineering, procurement, and construction project that turns cow manure into renewable natural gas (RNG).

The International Energy Agency estimates that annual global methane emissions are around 570 million tonnes. Full-scale decarbonization will require innovative solutions to curb or reuse emissions current industrial processes—agriculture included.

“We chose Black & Veatch as our EPC partner for the Lafayette County facility because their experience in developing decarbonization solutions for industrial facilities aligns perfectly with our sustainable vision,” said Martin Gilkes, chief operating officer at Amp Americas. “Their expertise directly supports our efforts to harvest energy from waste materials, accelerating the global transition to renewable fuels.”

Amp Americas develops, owns, and operates on-farm dairy RNG projects that produce carbon-negative RNG and prevent GHG emissions. The new on-site facility will use anaerobic digestion to convert manure into RNG, which can then be marketed as a carbon-negative fuel to large fleet customers.