Out-Law News 1 min. read

Agreement reached on Japan-Australia hydrogen project design

Five companies have signed an agreement on the initial design of a project to produce and liquify green hydrogen in Queensland, Australia for export to Japan.

The companies have agreed the front-end engineering design (FEED) for the Central Queensland Hydrogen Project (CQ-H2), which will involve producing green hydrogen on a large scale using renewable energy, liquifying the hydrogen at a location in the Gladstone region in Queensland, and then exporting the liquefied hydrogen to Japan. Up to 640 megawatts (MW) of electrolysers will be installed to produce the hydrogen, with phased production and supply of liquified hydrogen due to commence from around 2030.

A hydrogen liquefaction facility will be built at the Port of Gladstone. It will be designed to produce 400 tonnes of liquefied hydrogen per day for export by the end of 2030.

Karah Howard of Pinsent Masons said: “In the race towards securing a stable low cost supply of green hydrogen, this five-party agreement supported by Australia, Japan and Singapore is an extremely positive step towards achieving zero-carbon targets. The Gladstone region is well situated for production and export of green hydrogen, being proximate to Singapore and Japan with a sizable port, and located within an industrial zone designated as a hydrogen hub by the Australian government.”

The FEED stage of the project will include the implementation of the various designs and detailed cost studies required for the final investment decision, according to a press release. It will also incorporate preparing the various contracts required for commercialisation; obtaining the permits and approvals required for construction and development; and finalising the financing plan.

The five companies are three Japanese companies: Marubeni Corporation, Iwatani Corporation and Kansai Electric Power Co., Inc.; Australian energy infrastructure company Stanwell Corporation Limited; and Singapore-based energy infrastructure company Keppel Infrastructure. Production will increase in stages in accordance with demand from off-takers Kansai Electric Power and Keppel.

The FEED is expected to cost A$117 million. In May, the Australian Renewable Energy Agency (ARENA) committed a A$20 million loan to Stanwell to support the FEED.

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