European oil major BP has a clean hydrogen project production pipeline of 700,000t/yr, with the potential to expand that figure to 1.3mn t/yr, CEO Bernard Looney said during a strategy update. BP has only formally announced half of this pipeline, he notes.

BP aims to leverage its existing refinery demand for hydrogen to create a portfolio of regional supply hubs, with an aim to capture a 10pc share of core markets by 2030, Looney says. The company reported its highest profits for eight years in 2021 on the back of surging energy prices.

“We are focused on growing scale in key regionally integrated markets such as the UK, Europe and the US,” he says. “And we are playing to our strengths here. We are leveraging our technical capabilities. We are leveraging our existing demand at our refineries to be that anchor for those first projects,” Looney says. “We are confident and energised by the potential of this business,” he adds.

BP is developing a large-scale green hydrogen production facility at Teesside in northeast England, with startup targeted for 2025. FID on the project is expected next year.

1.3mn t/yr – Potential BP production project pipeline

Looney says he is confident the right policy support will be available to help scale up BP’s hydrogen business. “We see it here in Britain as we are trying to build a green and a blue hydrogen plant up at Teesside,” he says. “So I think we will get the support that we need. Customers are crying out for this. They are all under pressure to decarbonise their portfolios.”

Customers would initially have to be prepared to pay “a little bit of a premium” for clean hydrogen, Looney says, as the industry scales up production to become more cost-competitive.

BP has designated hydrogen as one of its five “transition growth engines” as part of an accelerated strategy outlined this week. It expects to increase the proportion of its overall capex spent on these transition businesses to more than 40pc by 2025 and is aiming for around 50pc by 2030.

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Author: Stuart Penson