BP plc has reportedly agreed to buy a 40.5% stake in the AREH (Asian Renewable Energy Hub), a major green hydrogen and renewables project located in Western Australia.
The oil giant recently announced that it would be operating the development. It added that the project has the potential to be one of the world’s largest hubs of green hydrogen and renewables.
The Pilbara region-based project is foreseen to develop close to 26 gigawatts of combined capacity of solar and wind generation.
The fundamental idea behind the hub is to deliver power to local customers. The ammonia and hydrogen produced would be used domestically as well as exported internationally.
BP asserted that a full capacity AREH would produce close to 9 million tonnes of green ammonia or 1.6 million tonnes of green hydrogen per annum. The oil and gas supermajor has stated that it would commence project operations by July 1st subject to regulatory approvals.
It is worth mentioning that hydrogen has a broad application range and can be utilized across a variety of industries. Hydrogen can be produced using several methods like electrolysis, where an electric current splits water molecules into hydrogen and oxygen.
If the electricity used in this process is produced from a renewable source like solar or wind, then it is called renewable or green hydrogen.
Interestingly, BP did not reveal the equity value of the AREH project. Some of the other stakeholders include Macquarie’s Green Investment Group, Macquarie Capital and CWP Global, and InterContinental Energy with respective stakes of 15.3%, 17.8%, and 26.4%.
Although this announcement has pumped up the Asian Renewable Energy Hub, the development of the project has faced several challenges. This includes June 2021’s judicial decision to put a stay on the AREH project citing unacceptable environmental damages.
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