Aussie firm to produce green LNG from hydrogen & captured CO2
Melbourne-based Southern Green Gas on May 24 announced it was seeking four founding buyers to assist with the funding and development of a plant to produce so-called green LNG from hydrogen and captured CO2.
Southern Green Gas aims to be the first to bring a scalable green LNG solution to market, for production in Australia and for export globally. The business leverages Australia’s “three co-located competitive advantages” of abundant sunshine, plentiful non-arable land and extensive gas pipeline and LNG infrastructure, it said.
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The company plans to use solar-generated electricity to condense water from the atmosphere then extract the hydrogen from that water. It will then filter out CO2 from the atmosphere and combine it with hydrogen to produce renewable methane, which in turn can be converted to green LNG.
Southern Green Gas plans to jointly develop a pilot plant to produce renewable methane with Australian gas infrastructure company APA at the Wallumbilla gas hub near Roma in Queensland – a project supported by the Australian government's renewable funding agency, Arena. The renewable methane will be injected into APA's gas pipelines.
Southern Green Gas will invest A$2.2mn ($1.7mn) in one renewable methane module, which will be integrated and commissioned at the University of Newcastle later this year and then moved to the Wallumbilla site in early 2022. The company is simultaneously working on a commercial-scale project that will be sited in western New South Wales near APA’s existing Moomba to Sydney pipeline. It will have an initial output of 30,000 metric tons/year, potentially reaching up to 1mn mt/yr.
Southern Green Gas is aiming for project commitments totalling 10mn mt/yr capacity by 2030. To fund its plans, it is offering founding buyers the right to offtake a portion of the output from its projects.
The company's managing director Rohan Gillespie told NGW that he expected interest in the green LNG from the global oil and gas majors, as well as shipping and trading firms.
“Initial agreement would give the buyers the option to secure off-take. Then for each project, there would be a long-term sale agreement of typically 15 years,” Gillespie explained. The company expects the first commercial project to see financial closure in about 30 months from when the buyers are on board.
Huge potential for exports
Although the local Australian market offers demand potential, the real opportunity lies in the export market, according to Gillespie. “The export potential for green LNG is many times than the Australian market. We can really scale up as per the demand because Australia has plenty of sunshine and large tracts of non-arable land as well pipeline and LNG infrastructure,” he said.
North Asia and Europe are seen as important markets for green LNG, where the gas can be used for power generation and home heating. The shipping industry is likely to be another major demand driver, Gillespie said.
“We expect a demand of 10mn mt/yr of green LNG from the shipping industry alone by 2030,” he said.