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Essar Oil and Progressive Energy to set up hydrogen hub venture

Essar Oil (UK) Ltd, which operates one of the leading downstream energy businesses in the UK, and Progressive Energy Ltd, developers of HyNet North West, the UK’s leading industrial decarbonization cluster, have signed a Memorandum of Understanding (MoU) to set up a venture to produce low carbon hydrogen at Essar’s Stanlow Refinery in Ellesmere Port, Cheshire. The joint venture plans to manufacture hydrogen at the refinery for use across the HyNet region.

Essar Oil (UK) Ltd is a leading UK-focused downstream energy company whose main asset is the Stanlow Manufacturing Complex, in Ellesmere Port, Cheshire. One of the most advanced refineries in Europe it is situated close to the major cities of Liverpool and Manchester. With a throughput of 75 million barrels per year, Stanlow produces 3.5 billion litres of petrol, 4.9 billion litres of diesel and 2.3 billion litres of jet fuel annually. As such it is designated a key strategic national asset, annually producing over 16% of the UK’s road transport fuels while playing an important part in the country’s petrochemical industry by providing key feedstocks (photo courtesy Essar Oil UK).

According to a statement, the joint venture will manufacture hydrogen at the refinery for use across the HyNet region. It will provide Essar Oil UK with low carbon hydrogen to decarbonize its own energy demand in addition to creating a hydrogen economy across North West England and North East Wales.

Natural gas, and fuel gases from the refinery, will be converted into low carbon hydrogen, with carbon dioxide (CO2) safely captured and stored offshore in sub-surface reservoirs in Liverpool Bay.

Essar is committed to innovative growth as a means to create a positive impact on both the economy and the environment. HyNet and hydrogen production is integral to Stanlow’s strategy and will set it on a journey to be the UK’s first net-zero emission refinery with the ambition to avoid emissions of over 2 million tonnes of carbon dioxide to the atmosphere per year, the equivalent of taking nearly a million cars off the road, said Stein Ivar Bye, CEO, Essar Oil UK.

The hydrogen production hub will deliver clean energy to industries in the HyNet ‘low carbon cluster’, as well as to fuel buses, trains, and heavy goods vehicles (HGVs), to heat homes, and to generate electricity when the sun is not shining or the wind blowing.

We cannot reach net zero without decarbonising industry. Today brings a key milestone in that journey as Progressive Energy and Essar Oil UK sign a Memorandum of Understanding (MoU) setting out how we will work together to deliver this exciting project at Stanlow Refinery. Delivering net-zero requires a transformation of our energy system. HyNet offers a once-in-a-generation opportunity to create real change in energy production and consumption, creating a cleaner world for future generations. It will unlock the low carbon hydrogen economy in the North West, reducing emissions and creating and safeguarding jobs, said Chris Manson-Whitton, Director at Progressive Energy.

Phased project

The UK’s first low carbon hydrogen hub will initially produce 3 TWh of low carbon hydrogen each year from 2025. This will be quickly followed by a facility twice this size giving a total capacity of over 9 TWh of hydrogen per annum, equivalent to the energy used for heating across the whole of Liverpool.

This agreement marks a major step towards achieving our ambitions for a carbon-neutral borough in Cheshire West and Chester. It will introduce innovative and world-leading technology, a focus for investment in low carbon manufacturing, and create long-term green jobs for the residents of Ellesmere Port and beyond, said Councillor Louise Gittins, Leader of Cheshire West and Chester Council.

A total investment of approximately GBP750 million (≈ EUR 839.7 million) will be committed to delivering the two hydrogen production hubs. Follow on capacity growth is planned to reach 80 percent of the Government’s new target of 5 GW of low carbon hydrogen for power, transport, industry, and homes by 2030.

Hydrogen is going to play an incredibly important part in the future of our economy and I hope that Ellesmere Port will play a central role in the green jobs revolution we need to meet the challenge of climate change. Essar has had a presence in the area for the last decade and the signing of this agreement with Progressive Energy means that it will be here for many decades to come, said Justin Madders MP, Member of Parliament for Ellesmere Port & Neston.

Engineering well advanced

The project will use Johnson Matthey’s best-in-class Low Carbon Hydrogen (LCH) technology. In partnership with SNC-Lavalin, engineering is well advanced with funding provided by the UK Government’s hydrogen supply competition.

The agreement between Essar and Progressive Energy provides the basis to take the project through final development and into construction and operation. The project will be jointly delivered by the two companies.

Progressive Energy originated the HyNet North West decarbonization cluster, and Essar’s downstream energy activities in the area provide a natural structure for delivery.

With the support from the government to establish the appropriate business incentives, together with Progressive Energy, we are committed to undertaking the development and the financing of its construction. Hydrogen has a central role to play in our low carbon energy solution. We are demonstrating that the industry is committed to playing its part in the UK’s transformational hydrogen strategy, ended Stein Ivar Bye.

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