MOSCOW (MRC) -- Portugal's Galp Energia plans to install a 100-megawatt electrolyzer to power its refinery in Sines with green hydrogen by 2025, a project which could be expanded to up to 1,000 MW and be worth EUR1 billion (USD1.21 billion), reported Reuters with reference to Chief Executive Andy Brown's statement.
He told Reuters in an interview that the refinery, located south of Lisbon, was Portugal's biggest consumer of hydrogen from natural gas, but Galp wanted to gradually produce the zero-carbon fuel through a process of electrolysis using renewable solar energy.
Such hydrogen is now more expensive to extract than the heavily polluting conventional method of using heat and chemical reactions to release it from coal or natural gas, known as brown and grey hydrogen, respectively.
But Brown said "because of the cost of gas and the cost of CO2, at a certain point it can be profitable".
"It's a very exciting opportunity, we think we can profitably replace that hydrogen with green hydrogen," he said, adding that Galp should invest "between EUR100 million to EUR200 million in the first 100 MW by 2025".
"To fully convert the refinery to green hydrogen that will be closer to EUR1 billion – these are big investments," he said, adding that much still depended on whether Europe and Portugal give the right incentives for such renewable fuels.
Galp will be able to produce green ammonia or synthetic fuels, and as the project gains scale it could also sell green hydrogen to transport companies or highly polluting industries such as steel or cement manufacturing.
As MRC informed earlier, Portugal's oil and gas company Galp has fully ceased processing hydrocarbons at the smaller of its two refineries, in Matosinhos near Porto, since the beginning of 2021 due to the impact of the COVID-19 pandemic and the regulatory environment. Instead, it will concentrate its downstream operations and their future development at the 220,000-barrels-per-day Sines refinery equipped with deep conversion units.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.