Page 11 - AsianOil Week 22 2022

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SK E&S, Beijing Gas Group sign

LNG, blue hydrogen agreement

PROJECTS & SOUTH Korea’s SK E&S and China’s Beijing Gas produce green hydrogen – which uses renewable
COMPANIES Group have agreed to collaborate on LNG and energy.
blue hydrogen. The two companies signed a joint The two companies will now form a joint
co-operation agreement at the World Gas Con- team to explore specific projects.
ference in late May. This comes after SK E&S said in Septem-
Under the agreement, the two companies ber 2021 that it would target production of
will explore opportunities to expand the LNG 280,000 tonnes per year of blue hydrogen and
value chain, share operational know-how and 10mn tpy of green hydrogen by 2025. It is also
further co-operate on LNG imports and natural aiming to become a major global LNG pro-
gas sales. vider in South Korea, supplying 6mn tpy of
On hydrogen, SK E&S and Beijing Gas intend the super-chilled fuel by 2023 and 10mn tpy by
to develop the complete value chain, from pro- 2025. SK E&S intends to use CCS to decarbon-
duction to creating demand, according to the ise its LNG operations, supplying 1.3mn tpy of
South Korean company. Blue hydrogen is pro- carbon-neutral LNG based on CCS to South
duced from natural gas, with carbon capture Korea by 2025.
and storage (CCS) used to address greenhouse Blue and green hydrogen are still nascent
gas (GHG) emissions from the process. Under industries that need to be established on a com-
their agreement, SK E&S and Beijing Gas would mercial level. Green hydrogen in particular had
produce the blue hydrogen at the latter’s Tianjin been considered prohibitively costly, with addi-
LNG terminal, which is currently under con- tional research and development (R&D) needed
struction. A plan to blend hydrogen into natural to help bring costs down. However, rising natural
gas pipelines owned by Beijing Gas and build gas prices mean that green hydrogen now looks
a hydrogen fuel cell power plant is also under more competitive with blue hydrogen, which in
consideration, and the partners will also aim to turn has become more costly.™

OCEANIA

Shell takes FID on Crux project off Australia

INVESTMENT SHELL Australia announced on May 30 that it attractive,” stated Shell Australia’s chair, Tony
had taken a final investment decision (FID) on Nunan.
the Crux natural gas project offshore Western The super-major has not disclosed how much
Australia. the development of Crux would cost, but consul-
Development of Crux is aimed at provid- tancy Wood Mackenzie has estimated a figure of
ing additional feedstock gas to the Prelude at about $2.5bn.
Crux will be used to floating LNG (FLNG) facility, which has been “In a global context, Crux is an example of the
backfill the Prelude online since 2019, aside from some unplanned type of incremental, shorter-cycle, high-return
FLNG project. outages. development that the industry is targeting as it
Shell has partnered with SGH Energy to maintains capital discipline despite strength-
develop Crux, which is located in the northern ening commodity prices,” a Wood Mackenzie
Browse Basin, around 620 km north-east of research analyst, Michael Song, commented.
Broome. The project will involve a platform that He noted that it “has been a case of when rather
is operated remotely from Prelude and five initial than if the project would reach sanction, as the
wells, plus an export pipeline that will connect volumes are needed to ensure the FLNG facility
the platform to the liquefaction facility, covering produces at nameplate capacity into the 2030s”.
a distance of around 160 km. Shell said in its announcement that it
Construction on Crux will start this year, expects global demand for LNG to continue
with first gas anticipated in 2027. The project is growing “significantly”, with Asia in particular
expected to supply Prelude with up to 550mn representing a major market. The super-major
cubic feet (15.6mn cubic metres) per day of gas. touted Crux’s potential to help bolster custom-
“The use of Prelude’s existing infrastructure ers’ security of supply as well as allowing them
enables significantly reduced development costs, to decarbonise if they are substituting coal with
making Crux competitive and commercially natural gas.™

Week 22 03•June•2022 www. NEWSBASE .com P11