Liquefied Hydrogen Supply Chain Commercial Demonstration Project

Liquefied Hydrogen Supply Chain Commercial Demonstration Project

Following completion of the Hydrogen Energy Supply Chain (HESC) – Pilot Project phase in February 2022, in early March 2023, Japan Susio Energy announced it had chosen to allocate its Japanese Government’s Green Innovation Fund grant of ¥210 billion Japanese Yen to the commercial demonstration phase of the HESC Project in Victoria.

Main proponents: Electric Power Development Co. (J-Power) and Sumitomo Corporation (comprising the JPSC JV) and responsible for gaseous clean hydrogen production; Kawasaki Heavy Industries (KHI), Iwatani Corporation and INPEX Corporation (comprising Japan Susio Energy – JSE) and responsible for hydrogen liquefaction and shipment from the Port of Hastings to Japan	Main end-use classification: Export focus – liquefied hydrogen	Status: Under development	Estimated cost:
Other involvement:	Production details:	Location: Victoria, Australia	Announced funding: ¥210 billion Japanese Yen awarded to Japan Susio Energy through the Japanese Government’s Green Innovation Fund

Project description

The commercial demonstration phase of the HESC project follows on from the Pilot Project which was completed in February 2022 with the arrival of a shipment of liquefied hydrogen from the Port of Hastings in Victoria to the Port of Kobe in Japan.

The commercial demonstration phase would be delivered through two consortia: a production joint venture and a liquefaction and export joint venture:

• A J-Power and Sumitomo Corporation joint venture (JPSC JV) would be responsible for the production and supply of gaseous clean hydrogen. The joint venture would initially produce between 30,000-40,000 tonnes per annum of gaseous clean hydrogen, which would be extracted from Latrobe Valley coal (and which would include coal gasification and gas-refining facilities) with carbon capture utilisation and storage in the Bass Strait offshore Victoria. The JPSC JV notes that two carbon storage options in the Gippsland area are under consideration: the CarbonNet Project and the ExxonMobil affiliate operated Gippsland Basin Joint Venture of South East Australian Carbon Capture Storage Hub.

• A Kawasaki Heavy Industries, Iwatani Corporation and INPEX Corporation joint venture (Japan Susio Energy-JSE) would be responsible for liquefaction of the supplied gaseous clean hydrogen at the Port of Hastings and its shipment to Japan.  (Note: In October 2023, it was announced that Kawasaki Heavy Industries, Iwatani Corporation and INPEX Corporation had concluded a shareholder agreement for INPEX to acquire shares in JSE, a joint venture between Kawasaki and Iwatani.)

The JPSC JV notes that, subject to commercial agreements and meeting the required environmental permits and approvals, it is expected hydrogen production would commence by the late 2020s.

The project proponents note that the carbon intensity of the hydrogen produced would be verified using the Guarantee of Origin scheme being developed by the Australian Government.

In early March 2023, Japan Suiso Energy (JSE) confirmed it had chosen to allocate the Japanese Government’s Green Innovation Fund grant of ¥210 billion Japanese Yen to the commercial demonstration phase of the HESC Project. JSE notes this injection of capital would enable it to design and build commercial scale facilities to liquefy and ship the hydrogen from the Port of Hastings to the Port of Kawasaki in Japan.

As part of project development, the project partners will continue to review the results from the pilot phase and continue to engage with local communities, regulators and potential customers for HESC hydrogen, in readiness to build and operate a commercial-scale project.

At the beginning of November 2023, the project released an economic modelling report on the impacts of a commercial-scale project (at a future scale of 225,000 tonnes of hydrogen per annum), looking at two phases – investment and operations.

 

Reviewed (reviewed by a project proponent): October 2024