India’s Essar bolsters UK’s low-carbon goals with new JV

Essar Oil UK, which operates the Stanlow Refinery in Britain, has struck a joint venture tie-up with UK-based Progressive Energy to help meet targets for the country’s decarbonising hydrogen production hub.

Essar Oil UK, the British arm of the Indian conglomerate, has joined forces with UK’s engineering consultant Progressive Energy to set up a venture to produce low-carbon hydrogen at Essar’s Stanlow Refinery at Ellesmere Port in Cheshire, north-west England.

The joint venture will manufacture hydrogen at the refinery for use across the HyNet region – the UK’s leading industrial decarbonisation cluster being developed by Progressive Energy in north-west England. It will also provide Essar Oil UK with low-carbon hydrogen to decarbonise its own energy demand in addition to creating a hydrogen economy across north-west England and north-east Wales.

Low-carbon cluster

Stein Ivar Bye, Chief Executive Officer, Essar Oil UK, said: “Essar is committed to innovative growth as a means to create positive impact to both economy and environment. HyNet and hydrogen production is integral to Stanlow’s strategy and will set it on a journey to be the UK’s first net zero emission refinery with the ambition to avoid emissions of over 2 million tonnes of carbon dioxide to the atmosphere per year, the equivalent of taking nearly a million cars off the road.

“With the support from government to establish the appropriate business incentives, together with Progressive Energy, we are committed to undertaking the development and the financing of its construction. Hydrogen has a central role to play in our low carbon energy solution. We are demonstrating that the industry is committed to play its part of the UK’s transformational hydrogen strategy.”

Natural gas, and fuel gases from the refinery, will be converted into low-carbon hydrogen, with carbon dioxide safely captured and stored offshore in sub-surface reservoirs in Liverpool Bay. The hydrogen production hub is to deliver clean energy to industry in the HyNet “low-carbon cluster”, as well as to fuel buses, trains and heavy goods vehicles, to heat our homes, and to generate electricity when the sun is not shining or the wind blowing.

Once-in-a-generation opportunity

“We cannot reach net zero without decarbonising industry. Today brings a key milestone in that journey as Progressive Energy and Essar Oil UK sign a Memorandum of Understanding setting out how we will work together to deliver this exciting project at Stanlow Refinery,” said Chris Manson-Whitton, Director at Progressive Energy.

“Delivering net zero requires a transformation of our energy system. HyNet offers a once-in-a-generation opportunity to create real change in energy production and consumption, creating a cleaner world for future generations. It will unlock the low carbon hydrogen economy in the North West, reducing emissions and creating and safeguarding jobs,” he said.

According to the company, the UK’s first low-carbon hydrogen hub will initially produce 3 terawatt-hours (TWh) of low carbon hydrogen each year from 2025. This will be followed by a facility twice this size giving a total capacity of over 9TWh of hydrogen per annum, equivalent to the energy used for heating across the whole of Liverpool.

Best in class

A total investment of approximately £750 million will be committed to deliver the two hydrogen production hubs. Follow-on capacity growth is planned to reach 80 per cent of the UK government’s new target of 5GW of low-carbon hydrogen for power, transport, industry and homes by 2030.

The project intends to use Johnson Matthey’s “best in class” Low Carbon Hydrogen (LCH) technology. In partnership with SNC-Lavalin, engineering is well advanced with funding provided by the UK government’s hydrogen supply competition, the company said.

The new agreement between Essar and Progressive Energy provides the basis to take the project through final development and into construction and operation. The project will be jointly delivered by the two companies. Progressive Energy originated the HyNet North West decarbonisation cluster, and Essar’s downstream energy activities in the area provide a natural structure for delivery, the companies said in a statement.

“Hydrogen is going to play an incredibly important part in the future of our economy and I hope that Ellesmere Port will play a central role in the green jobs revolution we need to meet the challenge of climate change. Essar has had a presence in the area for the last decade and the signing of this agreement with Progressive Energy means that it will be here for many decades to come,” said Justin Madders MP, Member of Parliament for Ellesmere Port & Neston.

New economy

“The signing of this agreement is great news for Essar and Progressive Energy. It reaffirms the LEP’s belief that Cheshire and Warrington is at the forefront of developing a new hydrogen economy, and that with industrial partnerships such as this, we can support decarbonisation of key energy-intensive industries, helping government deliver its ambition for a green industrial revolution,” added Philip Cox, Chief Executive of the Cheshire & Warrington LEP.

Essar Oil (UK) Limited is a leading UK-focused downstream energy company that owns and operates the Stanlow Refinery located on the south side of the Mersey Estuary near Liverpool. Stanlow produces 16 per cent of UK road transport fuels and the refinery processes 10 million tonnes of crude and feedstocks annually.

Progressive Energy describes itself as experts in project development and implementation with extensive experience of overcoming the technical and commercial challenges associated with bringing new technologies to market.