Marathon Petroleum, TC Energy pull out of USD2 bn hydrogen JV in the Heartland Hydrogen Hub

Marathon Petroleum Corp. and TC Energy Corp. have pulled out of a USD2 billion hydrogen joint venture in North Dakota that was to play a key role in the Biden administration's Heartland Hydrogen Hub project, the oil and gas companies said.

The partners had planned to invest USD1.5 billion in Marathon's renewable diesel facility in Dickinson, North Dakota, by adding hydrogen and fertilizer production capacity and installing carbon capture equipment. The project, called Prairie Horizon Hydrogen, was also slated to receive up to USD500 million through the US Energy Department's hydrogen hub program, according to Sen. John Hoeven's (R-ND) office.

But earlier in August, Marathon and TC Energy said they had canceled Prairie Horizon and were no longer partners in the Heartland Hydrogen Hub.

The DOE committed up to USD925 million in October 2023 to the Heartland hub, one of seven projects selected for the competitive grant program. The project, led by the University of North Dakota's Energy & Environmental Research Center (EERC), proposes developing a regional hydrogen economy across the Upper Midwest.

As of Aug. 21, it was not immediately clear what would happen to Prairie Horizon’s half of the federal funds. Nikki Krueger, EERC’s director of communications, said the center and the DOE are still negotiating the terms of the grant.

"The EERC maintains solid relationships with a diverse spectrum of stakeholders that have an interest in hydrogen technology. These relationships extend well beyond the initial cornerstone partners of the Heartland Hydrogen Hub," Krueger said in an email. "The EERC maintains an optimistic outlook on the broad opportunities that hydrogen technology represents and is working with DOE to move into the Phase 1 activities of the Hub later this summer."

Marathon and TC Energy's proposed involvement in the Heartland hub had been to produce hydrogen from natural gas and other resources for ammonia-based fertilizer or fuel. The joint venture partners had said they were working with the Mandan, Hidatsa and Arikara (MHA) Nation, an oil and gas producer, and Sumitomo Corp. of Americas on the Prairie Horizon project.

A fourth partner in the Heartland hub, Minneapolis-headquartered utility Xcel Energy Inc., planned to use its nuclear, solar and wind power resources to produce electrolytic, or "green," hydrogen. Xcel is still involved in the hub, according to the EERC's website.

But Marathon has since decided to prioritize other projects, a company spokesperson said in an email. "We are focusing our North Dakota resources on maximizing the efficiency and optimizing the operations of our many existing assets in the state," including Marathon's renewable diesel facility, Mandan refinery and natural gas processing facilities, the spokesperson added.

A TC Energy spokesperson said the company will “continue to pursue development of projects that align with commercial preferences, leverage existing assets and internal capabilities, and that allow the company to establish a competitive advantage.”

Marathon and TC Energy are not the first companies to scrap plans to produce hydrogen in North Dakota. In 2021, Bakken Energy Corp. and Mitsubishi Power Americas Inc. had planned to convert the Great Plains Synfuels Plant into a blue hydrogen plant and source gas from the MHA Nation. The project was an early participant in the Heartland hub proposal. But in 2022, the US expanded tax credits for carbon capture, offering a new lifeline for the struggling plant and prompting its owner to back out of the sale.

Meanwhile, other green and blue hydrogen developers have said the market has taken longer than expected to materialize, due in part to delays in the release of US and European subsidies. On Aug. 15, Orsted A/S scrapped its FlagshipONE project under construction in northern Sweden, citing a lack of demand for its green hydrogen-derived shipping fuel. But clean energy analysts said the news should not be taken as hydrogen’s death knell.

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Kazakhstan's KazMunayGas (KMG) and China's Sinopec have completed a preliminary feasibility study for a terephthalic acid and polyethylene terephthalate project (TPA/PET) that will be carried out in Atyrau, west Kazakhstan, KMG said in a press release.

The project was discussed at a meeting between chairman of KMG's management board, Askhat Khasenov, and chairman of Sinopec's board of directors, Ma Yongsheng. Investment in the TPA/PETP project totals over USD8 billion, KMG said.

Now that the pre-feasibility study is over, KMG and Sinopec will embark on a front-end engineering and design project , according to the press release.

In 2023, Sinopec announced plans to build a terephthalic acid and polyethylene terephthalate plant in Atyrau. The plant is expected to be put into operation in 2029. According to KMG, the design capacity of the plant will be up to 735,000 tonnes of polyethylene terephthalate a year.

Paraxylene which is produced by the Atyrau refinery will be main feedstock for the TPA/PETP project.

The Kazakh Energy Ministry said earlier that modernization of the Atyrau refinery will have been completed by 2027, after which the refinery will start producing benzene and paraxylene for the TPA/PETP plant without reducing the production of gasoline and diesel fuel.

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Uzbek President Shavkat Mirziyoyev and Air Products President and CEO Seifi Ghasemi have discussed a plan for advancing the strategic partnership between Uzbekistan and the U.S. company, which are implementing joint projects worth over USD2.5 billion, Mirziyoyev's press service said, as per Interfax.

"Practical aspects of the steps to further expand mutually beneficial strategic cooperation with one of the leading international companies, which has actively been investing in the creation of high-tech industrial enterprises in Uzbekistan, were discussed," the press service said.

It was said during the meeting that the portfolio of joint projects with Air Products in Uzbekistan has already topped USD2.5 billion. "Agreements were achieved to implement innovating projects in hydrocarbon advanced refining, the manufacturing of chemical products, the adoption of cutting-edge technological solutions by the agricultural sector, and in training highly skilled specialists for the energy and chemical sectors," it said.

An agreement on an investment program of over USD10 billion was reached with Air Products during Mirziyoyev's visit to the United States in September 2023.

It was said then that Air Products would consider a number of promising projects in Uzbekistan such as coal conversion, the production of technical gases, hydrogen and nitrogen and acid gas disposal.

Air Products' ongoing projects in Uzbekistan include processing industrial gases at the Uzbekistan GTL synthetic fuel plant and producing synthesis gas, oxygen, nitrogen, and liquefied carbon dioxide at JSC Navoiazot.

Air Products is one of the world's leading producers of industrial gases and one of the largest suppliers of LNG process technology and related equipment.

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The Swiss authorities have joined some sanctions against Russia imposed by the European Union as part of the latter's 14th sanctions package this June, the Swiss government said in a statement, as per Interfax.

"On August 21, the Federal Council decided to adopt further measures of the EU's 14th package of sanctions against Russia," the statement said. In particular, measures include "a clarification of the bans on Russian diamonds, making them internationally harmonized," it said.

In addition, the Swiss authorities extended the deadline for granting certain exemptions enabling Swiss companies to cease operations in Russia.

The Swiss government said that on July 9, it added 69 individuals and 47 legal entities to the sanctions lists targeting Russia, following in the EU's footsteps.

On June 24, the authorities of the European Union adopted the 14th package of sanctions against Russia, which envisages restrictions targeting 116 individuals and legal entities and a ban on new investment and technology transfers to complete Russian LNG projects and the transshipment of Russian LNG in EU ports for deliveries to third countries.

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Russia had 0.04% consumer price inflation for the week August 13-19, the State Statistics Service (Rosstat) said, as per Interfax.

Inflation was 0.05% in the week August 6-12 and 0.00% for the week July 30-August 5. Prices rose 5.15% since the beginning of the year and 0.09% in the first 19 days of August.

It follows from data for the first 19 days of August this year and last that annual inflation in Russia was 9.04% as of August 19, down from 9.10% on August 12 and 9.13% at the end of July, based on weekly data - the Central Bank advocates this method to measure inflation. Annual inflation slowed to 9.04% on August 19 from 9.07% on August 12 based on average daily data for the whole of August 2023 - the Economic Development Ministry calculates annual inflation this way.

Fruit and vegetables fell 1.4% in price last week, after falling 0.9% the previous week, with drops for beetroot - 3.8%, carrots - 2.8%, potatoes - 2.6%, bananas - 2.0%, apples - 1.8%, tomatoes - 1.5% and onions - 0.7%, however cucumbers went up 2.1% in price.

Prices rose for butter - 0.8%, rye bread - 0.7%, pork, wheat flour - 0.5% and pasteurized milk and vermicelli - 0.4% but fell for mutton - 0.3% and chicken meat - 0.2%. Prices rose for local brands of passenger cars - 1.3%. Gasoline and diesel went up 0.3% and 0.1%, respectively after rising 0.3% and 0.1% the previous week also.

Economy class air fares fell 1.3% in the past week after rising 0.2% the previous week. The Russian Economic Development Ministry said in a price review that it estimated annual inflation at 9.04% as of August 19.

The ministry said consumer price inflation slowed to 0.04% in the week August 13-19. Food prices were unchanged after inching up 0.03% the previous week with deflation for fruit and veg accelerating to 1.42% but other foods rising 0.12% in price, compared with 0.11% growth the previous week. Price growth for nonfood goods quickened to 0.14% from 0.09%. Service charges fell 0.07% after rising 0.04% the previous week as domestic airfares went down 1.27%.

Russian GDP in the second quarter of 2024 increased by 4% compared to the second quarter of 2023 after growing by 5.4% in the first quarter. Rosstat published this preliminary estimate on Friday. Rosstat data coincided with the calculations of the Ministry of Economic Development (also 4%) and turned out to be slightly lower than the Central Bank’s estimate (4.4%).

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