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Amid widespread skepticism about the future scalability of the hydrogen industry, whether it be green, blue, gray or another imagined color, ExxonMobil certainly is not having trouble attracting major investors in its planned blue hydrogen hub at its refining and chemical complex in Baytown, Texas.
In just the past few weeks, the project – which ExxonMobil says will be the largest of its kind in the world when operational – has brought news of a pair of major investors in both the facility itself and its production. The Baytown plans remain a point of controversy with the climate alarm industry, given that it plans to use natural gas from the Baytown refinery operation as the feedstock to make so-called “blue” hydrogen. ExxonMobil’s plans include both using a portion of the hydrogen as a fuel to reduce the carbon footprint of the Baytown facility itself, with the majority used in the manufacture of low carbon ammonia.
A week ago, ADNOC, the Abu Dhabi national oil company, agreed to purchase a 35% equity stake in the facility itself, which is still in the complex phase of obtaining the needed local, state, and federal permits enabling its ultimate completion. Neither company was willing to disclose the value of the deal at this time.
His Excellency Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO, said: “This strategic investment is a significant step for ADNOC as we grow our portfolio of lower-carbon energy sources and deliver on our international growth strategy. We look forward to partnering with ExxonMobil on this low carbon-intensity and technologically advanced project to meet rising demand and help decarbonize heavy-emitting sectors.”
Darren Woods, ExxonMobil chairman and CEO, said: “We appreciate His Highness Sheikh Khaled bin Mohamed bin Zayed Al Nahyan’s support for this groundbreaking partnership. This is a world-scale project in a new global energy value chain. Bringing on the right partners is key to accelerating market development, and we’re pleased to add ADNOC’s proven experience and global market insights to our Baytown facility.”
In the latest major deal related to the Baytown hub, Mitsubishi Corp. announced Friday that it and ExxonMobil have agreed to a framework for a deal in which Mitsubishi will invest in not only a share of the facility, but also execute a long-term offtake agreement for a share of the low carbon ammonia it will produce. Ammonia is a key ingredient in fertilizers, another hard-to-abate industry. ExxonMobil says the Baytown hub will produce more than 1 million tons of low-carbon ammonia each year.
Artist’s conception of ExxonMobil’s Baytown Hydrogen Hub facility.
ExxonMobil
“We are excited to be closely collaborating with ExxonMobil to develop low-carbon hydrogen and ammonia supply chains that will bridge the United States and Japan. We are also working with Idemitsu Kosan Co.,Ltd., which is developing an ammonia hub near ours and intends to participate in ExxonMobil’s hydrogen facility with us. Together, we will lead this joint initiative to assist in the acceleration of the hard-to-abate sectors’ transition to clean energy,” said Masaru Saito Group CEO, Environmental Energy Group of Mitsubishi Corporation.
“Demand continues to build for ExxonMobilTM Low Carbon Hydrogen and ammonia,” said Dan Ammann President of ExxonMobil Low Carbon Solutions. “We look forward to furthering our leadership position, alongside Mitsubishi Corporation, to advance low-carbon hydrogen and ammonia globally, helping the world achieve a lower emission future.”
Mitsubishi says in its release that ExxonMobil expects to make final investment decision (FID) for the facility in 2025 with initial startup to occur sometime in 2029.
The Bottom Line
Though many experts and investors remain skeptical about the ultimate scalability of hydrogen of any made-up color (the element itself is colorless) for use as a fuel or manufacturing feedstock, major companies like ExxonMobil, ADNOC, and Mitsubishi appear intent on investing many billions of dollars into efforts to make it a reality.
Whether the hydrogen hub model can ultimately evolve into a profitable enterprise in the United States remains to be seen, but ExxonMobil’s track record related to big projects like the Baytown facility is cause for some degree of optimism. With FID anticipated in 2025, the world will find out soon enough.
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The post ExxonMobil Hydrogen Hub Attracts Billions From Major Investors appeared first on Energy News Beat.
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