US oil producer ConocoPhillips and Japanese utility JERA plan to jointly develop a hydrogen gas project in the US.
Besides providing natural gas, ConocoPhillips will also manage a carbon capture and storage facility for the proposed gas project, reported Reuters.
The agreement to supply gas for hydrogen, a clean fuel for electricity production, represents new opportunity for natural gas producers, reported the news agency.
Many firms, including Conoco, have entered long-term supply contracts with liquefied natural gas (LNG) developers that supply utilities.
A study to evaluate the hydrogen project’s feasibility could complete by the end of this year, according to JERA.
The proposed facility will generate hydrogen from natural gas and convert it into exportable ammonia to sell in the US, Europe and Asia.
Furthermore the clean ammonia will also be supplied to JERA and Uniper under long term sale and purchase agreements.
JERA Americas chief executive Steven Winn said: “JERA and ConocoPhillips will be a low-cost ammonia supplier to domestic and international markets.”
The facility could become operational within five to eight years at a location along the US Gulf Coast.
A Conoco spokesman refused to discuss the firm’s role in the project and the scale of investment, reported the news agency.
The firm has outlined investments in multi-billion-dollar US and Qatari LNG projects.
It is also analysing a carbon capture facility for an LNG plant being developed by Sempra, a gas and power rovider.
JERA Americas, the US unit of JERA, said the company, Germany’s Uniper and ConocoPhillips target to initially generate 2 million tonnes of ammonia annually and then may expand to 8 mtpa.
Ammonia is usually used in the manufacturing of fertilizers and offers a low-carbon fuel that could be burned to generate power.
JERA is exploring many locations along the Gulf Coast for the hydrogen, ammonia and CCS facility.
Image: The proposed facility will generate hydrogen from natural gas and convert it into exportable ammonia. Credit: Frauke Feind from Pixabay.