Sumitomo Corp. (Tokyo) and JGC Corp. (Yokohama, Japan) which operates the overseas engineering, procurement, and construction (EPC) business of the JGC Group, have signed a Front-End Engineering and Design (FEED) contract for the hydrogen-related project planned by Sumitomo Corp. in Gladstone, Australia.
Sumitomo is also partnering with ARA Petroleum LLC (Oman), an Omani oil and gas producer, to launch a feasibility study on a hydrogen hybrid project based on a local production and consumption model in Oman in January 2021.
The Australian Government’s National Hydrogen Strategy, formulated in 2019, sets out a vision of becoming a major global player by 2030, and the Australian Government is presently working to create a national hydrogen industry. The City of Gladstone, which is located in the State of Queensland, is attracting attention as a suitable location for hydrogen production and consumption. This is due to its existing industrial infrastructure, with government’s initiative on climate change, and having potential to decarbonize existing sectors, such as industry, mobility, ports and so on. It also has rich solar radiation with long daylight hours, which leads to the Green Hydrogen production site.
This project is part of broader program that aims long term to build local hydrogen production and consumption in Gladstone by producing hydrogen from electrolysis of water using electricity from Solar PV as the main power source. The initial hydrogen production plant, plans to produce 250-300 tons of hydrogen annually, with plans to scale up production. In addition to producing hydrogen at the initial plant, we are in parallel creating hydrogen demand in this region.
Sumitomo Corporation expects hydrogen to be one of the important energies in the future, and promotes hydrogen related business such as Local Production and Consumption projects and Large Scale Value Chain projects, that utilizes the regional requirements of energy and the characteristics of hydrogen.
As one of the key issues to be addressed as a corporate group, the JGC Group is making extensive efforts to expand the use of hydrogen energy, which is expected to be an energy source that does not emit CO2 when burned, and ammonia, which is expected to be one of the most promising hydrogen energy carriers in hydrogen transportation, where there are issues from an economic and safety perspective.
In October 2018, in collaboration with the National Institute of Advanced Industrial Science and Technology (AIST), Sumitomo became the first in the world to successfully synthesize ammonia from hydrogen produced by electrolysis of water using renewable energy sources and to generate electricity from gas turbines fueled by the synthesized ammonia, and we are currently collaborating with other companies to explore fuel ammonia production projects overseas. In addition, the partners are proposing a hydrogen production system that will produce hydrogen from synthetic gas made from waste plastics, in order to continue to contribute to the realization of a hydrogen society in Japan and abroad.
In Oman, where oil and gas are the main industries, has participated in the hydrogen ministerial conference led by the Japanese government and is actively working to utilize hydrogen. Against the backdrop of Oman’s efforts to promote the use of hydrogen, Sumitomo Corporation concluded a memorandum of understanding (MOU) with ARA in March 2020 and has engaged in discussions on the project.
This project aims to establish a hydrogen supply chain based on the local production and consumption model at a site, where ARA produces oil and gas, with a target to commence operations in 2023. 300 to 400 tons of hydrogen are expected to be produced annually from associated flare gas generated at the site and mainly utilized as a fuel for fuel cell vehicles that ARA plans to introduce at the site and also the captured CO2 will be effectively utilized in local industries. In addition, 20-megawatt solar power generation panels will be installed and used as a power source for the site and hydrogen production facilities. While contributing to decarbonization and cleanliness of oil and gas production activities through the Project, Sumitomo Corporation is considering expanding the model of the project both in Oman and overseas in the future.