BP announces plans for renewable hydrogen production at Spanish Castellon refinery

MOSCOW (MRC) -- BP announced on 28 February that the company was set to launch a renewable hydrogen cluster in the Valencia region, HyVal, at its Castellon refinery where biofuel production would increase, said the company.

BP is set to develop 2GW of electrolyser capacity at Castellon, which is forecast to be completed by 2030. Furthermore, BP said in a press release that biofuel production at the Castellon refinery would triple to 650,000 tonnes/year by the end of the decade with the hydrogen produced via electrolysis replacing its unabated hydrogen production currently located at the site.

The renewable hydrogen produced would be used as a feedstock in the biofuel production process, specifically for the production of sustainable aviation fuel (SAF), in addition to being used close to the site by the ceramic industry and the chemicals industry. In total, BP is set to invest EUR2 billion into the project.

The first phase will see at least 200MW of capacity electrolysis plant being installed at Castellon by 2027, expected to produce up to 31,200 tonnes/year of renewable hydrogen. The second phase will see capacity rise to as much as 2GW by 2030, with the electricity set to come from renewable generation assets (wind and solar) located near the site.

Spain has ambitions of being a net exporter of renewable hydrogen in the coming years, and the BP announcement follows on from several others surrounding investment in the country so far in 2023. Cepsa in February signed a deal with Fertiberia to boost renewable hydrogen production in Huelva as well as signing a memorandum of understanding (MoU) with ACE Terminal for the export of renewable ammonia from 2027, in addition to the Spanish and Dutch governments agreeing to cooperate more in the field of renewable hydrogen and hydrogen corridors.

The H2Med pipeline is set to move as much as 2 million tonnes/year of renewable hydrogen between Portugal, Spain, France, and Germany and is expected to become operational in 2030. In the country's hydrogen strategy, Spain is aiming for at least 4GW of electrolyser capacity by 2030 in addition to 25% of hydrogen consumption in industry to be renewable by 2030 as both a raw material and as an energy source.

Data from ICIS Power Horizon Forecast showed that hydrogen demand in Spain was forecast to increase from 18TWh in 2023 to 25TWh by 2030 against a production capacity of 23TWh, of which 16TWh is expected to be electrolyser capacity.

We remind, British energy company BP said it would invest nearly USD2 billion to develop a hydrogen hub in the Valencia region of Spain using its Castellon refinery as a foundation. BP unveiled plans to build up its electrolysis capacity at Castellon to produce so-called green hydrogen. Hydrogen production is described using a color spectrum and the most common form in use today is grey hydrogen, which splits methane (CH4) into its elemental components of carbon and hydrogen.

mrchub.com

MOSCOW (MRC) -- BASF Japan Ltd. has announced that the high-pressure regenerative CO2 capture technology HiPACT co-developed by BASF and its engineering partner JGC Corporation will be used by INPEX Corporation, one of Japan’s largest exploration and production companies, in its Kashiwazaki Clean Hydrogen/Ammonia Project, said Hydrocarbonprocessing.

This is Japan’s first demonstration project for the production of blue hydrogen/ammonia from domestically produced natural gas, the consistent implementation of Carbon Capture, Utilization and Storage (CCUS) in domestic depleted gas fields and the use of hydrogen for power generation and ammonia production. The project is funded by the Japanese governmental organization New Energy and Industrial Technology Development Organization (NEDO).

The HiPACT technology will be applied to efficiently capture and recover CO2 in the process gas from a hydrogen production facility using domestic natural gas as feedstock. Located in the Hirai area of Kashiwazaki City, Niigata Prefecture, Japan, the production facility is constructed by JGC Japan Corporation and is expected to start up in 2025. The recovered CO2 will be injected into the reservoirs of the depleted gas fields leveraging CCUS technologies for enhanced gas recovery (EGR).

By releasing the CO2 off gas above atmospheric pressure, HiPACT is expected to reduce CO2 capture and compression costs by up to 35% compared with conventional technologies. This is due to its excellent high-temperature durability and CO2 absorption performance. As CO2 can be stored underground in an energy-saving manner, maximum benefits are expected for Carbon Capture and Storage (CCS).

Mami Kawakatsu, Head of Sales, Intermediates Division of BASF Japan, said, “Following the successful use of BASF’s OASE® gas treating technology in another NEDO-funded CCS project in Tomakomai, Japan, we are pleased to provide HiPACT for Japan's first demonstration project to produce blue hydrogen and ammonia from domestic natural gas. The role of our excellent gas-treating technologies is recognized in these milestone projects in Japan’s net zero roadmap. We will continue to contribute to Japan’s 2050 carbon neutrality goal.

“The implementation of HiPACT is the result of our excellent partnership with JGC Group by combining our capabilities in process technology and plant engineering. We look forward to the use of HiPACT in expanding global CCUS landscape,” added Lawrence Loe, Director, OASE Gas Treating Excellence, Intermediates Asia Pacific, BASF.

BASF’s gas treating technologies have been used in more than 500 reference plants worldwide, and the company has more than 50 years of experience in this field. OASE is a CO2 capture technology for a wide range of applications, including natural gas, synthesis gas, flue gas and biogas. HiPACT is a specialized solution targeting natural gas and synthesis gas treatment equipped with CCS or with CO2- Enhanced Oil/Gas Recovery (EOR/EGR). HiPACT and OASE products significantly contribute to both cost savings and sustainability in the value chain.

We remind, BASF said it would cut 2,600 jobs, halt share buybacks and hike investment to improve competitiveness as it warned of a further decline in earnings due to rising costs. The German chemicals giant said in a statement that adjusted 2023 earnings before interest and tax (EBIT), would fall to between 4.8-5.4 billion euros (USD5.09-USD5.69 billion) from 6.9 billion euros in 2022, which was down 11.5% from 2021.

mrchub.com

MOSCOW (MRC) -- Brazil's state-run oil giant Petrobras said on Tuesday it will reduce gasoline and diesel prices at its refineries from Wednesday, a move that will likely offset the resumption of federal taxes levied on fuels, said Hydrocarbonprocessing.

Shares in the company dropped sharply after the news, trading down more than 3% by midday and making Petrobras one of the biggest fallers on the local benchmark stock index Bovespa , which slipped 0.5%. The price cut comes as the government announced on Monday it was set to resume the collection of taxes on fuels, ending a waiver set by former President Jair Bolsonaro last year - a measure that will boost government revenues but is seen as upsetting the middle class.

Brazil's finance ministry had already stated earlier in the day that cutting Petrobras prices was being considered as a way to counterbalance the effect of the tax increase, confirming a Reuters report citing sources. Petroleo Brasileiro SA, as the oil firm is formally known, said in a statement on its website it will lower average gasoline prices by nearly 4%, while diesel prices will be reduced by roughly 2%.

Gasoline will now be sold at 3.18 reais (USD0.6103) per liter, down from 3.31 reais, and diesel at 4.02 reais, against 4.10 reais earlier, the company said, adding the move was aimed at keeping local markets "in balance" with global rates.

The announcement came minutes after Brazil's government said Finance Minister Fernando Haddad would provide details on plans for fuel taxes in a press conference at 7 p.m. local time (2200 GMT). "We are still waiting for more information about the tax resumption to see if the net effect (of Petrobras' price cut) will be really negative," said Guilherme Sousa, an economist at Ativa Investimentos.

The ministry had announced on Monday it would reimpose taxes on gasoline and ethanol, but that the rate on the fossil fuel would be higher than that levied on the biofuel. The government, nonetheless, would still recover 100% of tax revenues that had been waived since 2022, it added.

Reuters reported earlier on Tuesday that the government and Petrobras had opened discussions on the possibility of the company cutting its own prices as a way of offsetting the impact on consumers' pockets. According to two sources familiar with the matter, who asked not to be named, the parties saw room for the firm to reduce both gasoline and diesel prices as local rates have been higher than those in international markets.

"There is room for compensation within the import parity policy," one of the sources said, referring to Petrobras' official policy of tracking international rates such as global fuel prices and foreign exchange.

We remind, Petroleo Brasileiro SA stepped up security at its refineries in a precautionary measure after threats against assets, including Brazil's biggest fuel plant. The threats were detected by Petrobras' intelligence unit monitoring social media communications of supporters of Brazil's far-right former President Jair Bolsonaro, the two people said. The state-controlled company said on Sunday night all its assets and refineries were operating normally.

mrchub.com

MOSCOW (MRC) -- Oil giant Saudi Aramco has agreed to take a minority stake in a new powertrain engine company that French car maker Renault SA and China's Geely Automobile Holdings Ltd plan to set up jointly, said Hydrocarbonprocessing.

A report in January said that Aramco has been involved in advanced discussions to take a stake of up to 20% in a previously announced but still-unnamed Geely-Renault powertrain company that would develop and supply internal combustion engines (ICE) and hybrid technologies.

They said on Thursday Geely and Renault are expected to retain equal equity stakes in the new independent entity, but did not disclose how much each would own and how much Aramco would invest. The new joint venture is aimed at developing more-efficient gasoline engines and hybrid systems at a time when the focus of much of the automobile industry has been on the capital-intensive transition to purely electric vehicles.

"This partnership with Aramco will... give it a head start in the race towards ultra-low-emissions ICE powertrain technology," Renault CEO Luca de Meo said in the statement. By carving out its internal combustion engine business, Renault plans to focus on electric cars, part of the French automaker's broad restructuring that also involves overhauling its decades-old alliance with Nissan Motor Co.

"Aramco’s entry brings to the table unique know-how that will help develop breakthrough innovations in the fields of synthetic fuels and hydrogen," De Meo said. The deal would make Aramco the first major oil producer to invest in the car business, as the rise of electric cars threatens to cut demand for conventional fuels.

Last year, Aramco announced a partnership with Hyundai Motor Co to study advanced fuels that could be used in hybrid engines to reduce CO2 emissions. For Geely, the deal with Renault extends its pattern of building partnerships to expand beyond China. Geely previously announced a hybrid gasoline engine development deal with Mercedes-Benz and holds a stake in the German automaker.

The new company would have an annual production capacity of more than 5 million internal combustion, hybrid and plug-in hybrid engines and transmissions per year, the companies said.

We remind, the Ministry of Investment of Saudi Arabia has inked an agreement worth $1 bn with UPL Ltd to produce specialized agriculture chemicals within the Kingdom.

mrchub.com

MOSCOW (MRC) -- Russia's revenues from oil and gas exports dropped by nearly 40% in January as price caps and Western sanctions squeezed the proceeds from Moscow's most lucrative export, said Hydrocarbonprocessing.

Russia's oil and gas export revenues were USD18.5 billion in January, 38% lower than the USD30 billion Moscow received in January 2022, a month before its invasion of Ukraine, according to IEA numbers shared with Reuters. IEA Executive Director Fatih Birol said Western measures targeting Russian energy exports had achieved their aims of stabilizing oil markets and reducing Moscow's revenues from oil and gas exports.

"Our expectation is that this oil and gas revenue decline will be steeper in the next months to come. And even more steep in the mid-term, as a result of the lack of access to technology and investment," Birol told Reuters. International restrictions imposed on Russia in response to the Ukraine war, including a USD60 a barrel crude price cap imposed by Group of Seven countries, have left Russia's Urals blend being sold at a heavy discount to Brent.

The 27-country European Union also banned Russian seaborne oil imports from December, and has placed sanctions on exports to Russia of technologies needed for oil refining. The United States and Britain have also imposed restrictions on Russian oil imports.

Moscow relies on income from oil and gas - last year around 11.6 trillion roubles (USD154.68 billion) - to fund its budget spending, and has been forced to start selling international reserves to cover a deficit widened by the cost of its invasion of Ukraine.

Europe is meanwhile racing to wean itself off Russian gas, after Moscow cut pipeline deliveries to the EU following its Feb. 2022 invasion of Ukraine. That pushed European gas prices to record highs and left countries struggling to find alternative supplies and launch energy-saving measures. Birol said EU countries made progress in improving energy security last year, including a rapid expansion of renewable energy and heat pumps to reduce the need for fossil fuels.

But he said risks remain, and countries needed to keep up efforts to save energy and safeguard supplies. Europe's ability to secure enough gas could be challenged by rising demand from China, or if Russia cuts off the gas it still sends to Europe.

We remind, Russia's crude oil exports to the European Union in January fell to around 600,000 barrels per day (bpd) from 1 million bpd in December as seaborne volumes dried up except to Bulgaria, International Energy Agency (IEA) data showed. The EU imposed a ban on seaborne Russian crude oil imports from Dec. 5 and G7 countries set a price cap on Russian seaborne exports at USD60 per barrel over Russia's invasion of Ukraine in February 2022. Bulgaria has secured a two-year exemption from the ban.

mrchub.com