BP (LON: BP) has entered the final stage of negotiations with the UK Government and signed contracts for its H2Teesside project.
The company has agreed a statement of principles with the UK Government’s Department for Energy Security and Net Zero (DESNZ), paving the way to start the final stage of detailed negotiations – signing a low carbon hydrogen agreement.
In addition, it has struck front-end engineering design (FEED) contracts for the H2Teesside project.
The company selected Technip Energies to deliver the FEED for the proposed blue hydrogen production facility with integrated carbon capture.
The contract includes establishing the EPC execution methodology, a robust schedule and project cost, which will be completed in 2025.
BP also awarded Costain a contract to develop hydrogen pipeline network in the Teesside area as part of a major clean energy development in the region.
Costain will deliver the FEED for the 31km onshore pipeline distribution network. This will provide purified and dehydrated hydrogen from BP’s new hydrogen production facility to industrial end users.
The engineering firm is expected to complete the multimillion-pound FEED project in 2025.
BP’s H2Teesside (H2T) aims to produce approximately 160,000 tonnes of low carbon hydrogen per year.
H2T is part of the larger East Coast Cluster, a major carbon capture and net zero power initiative across the Teesside area. BPs hydrogen projects will integrate with other decarbonisation projects in the region.
It could capture and send for storage over 2m tonnes of CO₂ per year.
Vice-president for hydrogen and CCUS at BP UK Andy Lane said: “These agreements mark further critical milestones for H2Teesside as the project continues to move towards EPC contracts and then construction. The project could play a critical role in decarbonising industry on Teesside, helping to transform the region into a leading hydrogen hub and kickstart the UK’s low carbon hydrogen economy.”
Earlier this year, Net Zero Teesside Power (NZT Power) and the Northern Endurance Partnership (NEP) dished out around £4 billion worth of contracts as part of the initiative.
These included a variety of power and carbon capture and storage infrastructure.
Final investment decisions on the projects are expected for September 2024, with first commercial operations from 2027.
EDF also struck a deal to supply hydrogen to Green Lithium Refining as a feedstock at its lithium refinery at PD Ports in Teesside.
Senior vice-president for gas and low carbon energies at Technip Energies Mario Tommaselli said: “Being selected for BP’s H2Teesside project highlights Technip Energies’ proven experience in working as a technology integrator on large-scale projects.
“By leveraging our extensive expertise in hydrogen and carbon capture technologies, we are well-positioned to deliver innovative and scalable solutions that align with the UK’s ambitious decarbonisation targets.”
Costain managing director of natural resources Sam White said: “Our in-house engineering expertise will design a world-leading network that will safely transport hydrogen to provide industrial users with an alternative to natural gas, a key step in the development of the hydrogen economy.
“In addition to the environmental benefits, this is a project that will be transformative for Teesside and its people, creating jobs and developing skills throughout the region. In transportation, water, and energy, we’re committed to delivering critical infrastructure that improves lives and prosperity across the North-East of England.”
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