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Petronas eyes $1.3B project in Alberta to export hydrogen to Asia

CALGARY — The Canadian division of Malaysia’s state-owned oil giant Petroliam Nasional Berhad, or Petronas, plans to study the feasibility of building a $1.3 billion petrochemical plant in central Alberta with the goal of exporting hydrogen to Asian markets.

Petronas Energy Canada Ltd. announced Tuesday it has teamed up with Japan’s Itochu Corp. and an unnamed Calgary-based pipeline company on a feasibility study on a facility capable of producing 1 million tonnes of ammonia per year while capturing the carbon emitted in the process.

“Ammonia is a very efficient means for the transportation of hydrogen,” said Petronas Energy Canada president and CEO Mark Fitzgerald in an interview Tuesday.

The combination of nitrogen and hydrogen, which in this case would be sourced from Petronas’ natural gas operations in northeast British Columbia, produces ammonia.

“At the end point, the user, which in this case would be markets overseas, would split it into nitrogen and then hydrogen, which would be used as a fuel source,” Fitzgerald said, adding the project would be considered a “blue ammonia” or “blue hydrogen” because it would capture the associated carbon emissions.

Both Petronas and Itochu, a Japanese conglomerate, would jointly market the ammonia produced at the facility in Asian markets, “potentially for thermal power generation in Japan, replacing hydrocarbon-based fuels for power plants, steel, chemical production and other applications.”

Japan’s economy, trade and industry ministry has a goal of securing 30 million tonnes of ammonia by 2050 in an effort to reach a net-zero carbon emissions goal by 2050.

Fitgerald said Petronas, which operates in over 90 countries, believes Canada is an ideal place to develop the blue ammonia/blue hydrogen facility because of the country’s vast natural gas reserves, its hydrogen strategy and willingness to support carbon capture utilization and storage (CCUS) investments.

“Both the Alberta government and the government of Canada have committed to working with private sector companies such as ourselves to really drive that hydrogen strategy for Canada. We have an abundant supply of natural gas, which transitions to blue hydrogen,” he said.

Alberta’s Associate Minister of Natural Gas and Electricity Dale Nally said his government was pleased by Petronas’ and Itochu’s decision to pursue an ammonia production facility in Alberta.

“This is an incredible opportunity for Alberta’s natural resources to reach new markets and further display the innovation that powers our dynamic energy sector,” the minister said in an email.

If the companies decided to proceed with the project, they expect to start construction in 2023 and produce ammonia in 2027. The companies believe construction on the project will create 10,000 direct and indirect jobs and 3,300 permanent jobs once the facility is operational.

Fitzgerald declined to name the local pipeline company participating in the project’s feasibility study.

Both TC Energy Corp. and Enbridge Inc. have previously worked to develop westbound natural gas pipelines for proposed liquefied natural gas (LNG) projects on the B.C. coastline including the Prince Rupert Natural Gas Transmission line, which is fully permitted by regulators, and the WestCoast Connector Gas Transmission line.

As the LNG facilities associated with those projects have been scrapped in recent years, officials in the Alberta government are hopeful the pipelines could be repurposed to transport hydrogen to the West Coast before ultimately being exported to Asia.

Source: Financial Post


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