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Leading IOCs skipping blue hydrogen and going green

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Leading international oil companies (IOCs) are restructuring their businesses to adopt new energy transition technologies to become integrated energy providers, with top integrated oil companies having so far announced projects to produce over 2.9mn t/y of low carbon hydrogen, according to GlobalData. Green hydrogen projects (produced using electricity from renewable sources) are a particular focus, accounting for some 87% of the projects, says the market analyst (see Fig 1). 

Barbara
Monterrubio, Energy Transition Analyst at GlobalData, adds that: ‘IOCs have also improved their footprints in other aspects of the purported hydrogen economy. They have done this by investing in fuel cell technologies, refuelling networks, and hydrogen storage to create alternative revenue streams in the energy sector. Furthermore, European integrated companies have also rapidly invested in cleaner energy sectors.’ 

The refinery and chemicals sectors represent the bulk of existing hydrogen demand. Low carbon hydrogen projects can help decarbonisation efforts for oil and gas companies’ own operations. Utilising hydrogen as a key feedstock for the chemical industry in producing low carbon ammonia and methanol, as well as developing biofuels, are sectors which will see increasing hydrogen demand within the oil and gas sector. 

Monterrubio adds: ‘Hydrogen demand in other sectors, such as transportation and power, has the potential to increase rapidly. Hydrogen’s potential as a cleaner burning alternative to conventional fuels makes it a good alternative, as the oil and gas industry can leverage its assets to reap benefits in the evolving hydrogen economy. The big oil companies are investing in the development of hydrogen refuelling stations. For example, Sinopec expects to set up 1,000 hydrogen fuelling stations across China in the next five years. Companies have also invested in fuel cells to capitalise on the prospective application of hydrogen fuel in the transportation sector.’

Figure 1: Blue and green hydrogen capacity for top integrated oil companies
Source: GlobalData

News Item details


Journal title: Petroleum Review

Organisation: GlobalData

Subjects: Refining, Hydrogen, Oil and gas, Petrochemicals, Forecasting, Low carbon, Green hydrogen, Blue Hydrogen

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