Equinor lines up provisional offtake agreements for 600 MW UK hydrogen project

Equinor has signed a series of provisional offtake agreements for hydrogen from its planned H2H Saltend project in the northeast of the UK, as it submits the project for funding under the government's phase two carbon capture and storage cluster sequencing process.

The company has signed provisional agreements to supply hydrogen to six companies in the region from the proposed 600 MW low-carbon hydrogen plant east of Hull, enabling fuel switching from natural gas, Equinor said in a statement Jan. 21.

The companies involved are Centrica Storage, Ineos Acetyls, rare earths processor Pensana, Triton Power's Saltend Power Station, Vital Energi and Vivergo Fuels.

"We are delighted to submit our formal plans to government for our flagship H2H Saltend project, as well as three other low-carbon projects across the UK," Equinor Executive Vice President for Marketing, Midstream and Processing Irene Rummelhoff said in the statement. "This shows the strength of ambition from Equinor in the UK, building on its considerable experience of similar projects internationally."

"H2H Saltend will provide low-carbon hydrogen to multiple industries in the Humber by 2026, and the demand for this is clear from the industrial operators' agreements we already have in place," she said.

The plant would reduce CO2 emissions in the region by 1.1 million mt/year, Equinor said.

Hydrogen applications

Centrica Storage would use the hydrogen at its Easington natural gas storage facility to power gas compression operations, an Equinor spokesperson told S&P Global Platts.

Ineos Acetyls plans to replace fossil fuels with hydrogen in its chemicals production process at the Saltend Chemicals Park, where Pensana is also establishing a rare earths processing facility. Using hydrogen in processing end-of-life magnets would allow low-energy recovery of critical rare earths for recycling, the statement said.

Triton Power is aiming to switch its Saltend Power Station, which provides power and steam to the chemicals park, to run on hydrogen rather than natural gas. Vital Energi also aims to use hydrogen for electricity generation, while bioethanol producer Vivergo is assessing the scope for using hydrogen as a fuel replacement for natural gas.

Equinor said the hydrogen from its Humber facility could also be used in other heavy industry applications, transport and heating across the region.

CCUS clusters

Equinor is also applying for phase two funding under the UK government's CCUS cluster sequencing program for H2H Saltend, as well as proposed carbon capture power stations at Keadby and Peterhead with utility SSE Thermal, and the Net Zero Teesside Power project, being developed with BP.

The wider East Coast Cluster was one of two clusters to receive government backing under the first phase of funding.

The Equinor spokesperson said that funding under the second round for specific projects within the cluster would enable the company to deliver them more quickly.

Selection in the cluster sequencing process means companies will enter negotiations with the government for financial support.

Hydrogen power station

Equinor plans to build a further 1.2 GW of low-carbon hydrogen production, which will largely be used to fuel the Keadby hydrogen power station, which it is developing with SSE Thermal.

The Keadby power station is expected to start up in 2028-29, reducing CO2 emissions by around 2 million mt/year.

The combined 1.8 GW of hydrogen production capacity is over a third of the UK's 5 GW capacity target by 2030.

Calculated costs for blue hydrogen production from natural gas with carbon capture and storage are currently lower than for green hydrogen, produced by electrolysis of water powered by renewables.

But electrolyzer costs are falling rapidly, with expectations that costs could be competitive with blue hydrogen in some locations this decade.

S&P Global Platts assessed the cost of producing hydrogen by autothermal reforming with carbon capture and storage in the UK at GBP4.15/kg ($5.63kg) on Jan. 20, including capex and carbon.

Hydrogen production via alkaline electrolysis (including capex) was assessed at GBP11.83/kg.