Origin, Fortescue Target Hydrogen From Australia’s Island State

Origin Energy Ltd. and Fortescue Metals Ltd. will look into developing export-scale hydrogen and ammonia facilities in Tasmania’s Bell Bay region, with backing from the state government.

Origin announced a A$3.2 million ($2.3 million) feasibility study into a plant producing hydrogen from renewable energy, which would then be combined with nitrogen from the air to create ammonia for shipment. The plan envisages output of 420,000 tons of ammonia per year for export to Asian markets such as Japan and South Korea. Fortescue’s project proposes a plant capable of producing 250,000 tons of ammonia a year.

Ammonia is seen as safer and more efficient to transport than hydrogen. It can then be converted back to hydrogen at its destination, or used itself as a fertilizer or in chemicals manufacturing.

Both studies are being backed by Tasmania’s state government, which earlier this year announced a 10-year plan to build a hydrogen export industry by 2030. The plan involves harnessing the island’s strong renewable resources, which already meet almost all of its energy needs mainly from hydro power.

Origin’s study is expected to be completed by December 2021, with first production targeted for the mid-2020s if the project goes ahead. Fortescue, which last week announced ambitious plans to expand in clean energy production, is targeting an investment decision in 2021.

“We are assessing clean energy opportunities locally and internationally to capitalize on the important role that green hydrogen will play to ensure the world can meet the Paris 2050 targets,” Fortescue Chief Executive Officer Elizabeth Gaines said in a statement. “The Tasmania project will be an important step in demonstrating our intention to position Australia at the forefront of the establishment of a bulk export market for green hydrogen.”

©2020 Bloomberg L.P.

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