Oil major BP has agreed to buy a 40.5% stake in a 26GW wind and solar hybrid project in Australia that would be used to produce green hydrogen and ammonia.
Output from the Asian Renewable Energy Hub (AREH) project in Western Australia could be used to produce 1.6 million tonnes of green hydrogen or 9 million tonnes of green ammonia annually, BP claimed.
The project developers intend to supply renewable power to customers in the local mining region and produce green hydrogen and ammonia for the domestic Australian market and export to major international users.
It is unclear how much BP has agreed to pay for the stake, or who it has brought the stake from.
The transaction is due to close on 1 July 2022 subject to approvals.
Upon completion of the deal, Hong Kong-based developer Intercontinental Energy (26.4%), Australian counterpart CWP Global (17.8%) and Macquarie’s renewables investment arm Green Investment Group (15.3%) will own the remaining stakes in the AREH.
The AREH project was first proposed in 2014 and is due to be built on a 6,500km2 site in the Pilbara region, which has access to abundant solar and wind resources, the developers added.
Australia’s previous government last year rejected plans to expand the project from 15GW to 26GW due to impacts on wetlands and migratory bird species. The developers have already secured approval for the initial 15GW, InterContinental’s president Alicia Eastman told Windpower Monthly.
BP’s confirmation of the deal follows TotalEnergies and Adani announcing plans to invest US$5 billion to develop hydrogen and derivatives in India.
Vice president of analysis firm Wood Mackenzie, Prakash Sharma, said there is growing momentum in green hydrogen investments in Asia, and that he expects Australia to emerge as a dominant player in the hydrogen and ammonia market.
He added: “The investments committed by BP and TotalEnergies confirm the industry’s confidence in hydrogen technology.”
This story is being updated.