ARENA to support FEED study on Stanwell’s CQ-H2 Project

602
Image credit: ARENA, Linkedin

Stanwell Corporation Limited has received a $20 million grant from the Australian Renewable Energy Agency (ARENA) to support a front-end engineering and design (FEED) study for the Central Queensland Hydrogen (CQ-H2) Project.

The $117 million project will complete the development stage of the CQ-H2 Project, which will initially comprise the construction of up to 640 MW of electrolysers to manufacture hydrogen in preparation for commercial operations to begin in 2028. The hydrogen production plant will generate gaseous renewable hydrogen, which will be acquired and transformed into renewable ammonia and liquid hydrogen for export by offtakers.

The facility will initially generate 200 tonnes of hydrogen per day (tpd) and will ramp up in 200 tpd increments if more offtake agreements are acquired, with a maximum scale expected to reach 800 tpd for commercial operations in 2031.

The FEED study will also look into the establishment of a hydrogen liquefaction facility at the Port of Gladstone that would produce 400 tonnes of liquefied hydrogen per day for export by the end of 2030.

Adertisement

A consortium of companies from Australia, Japan, and Singapore has been created to harness the specialised expertise given by each of the partners across the hydrogen production supply chain. Along with Stanwell, consortium members include Iwatani Corporation, Kansai Electric Power Company, Keppel Infrastructure, and Marubeni Corporation.

In June 2022, Stanwell and several consortium partners conducted a feasibility study for the project, which earned $2.16 million in ARENA funding and demonstrated that the project is technically possible and financially viable with adequate government backing in the early stages. The FEED study will use the feasibility study results to generate the preferred technical, commercial, and social needs for the project, allowing for a final investment choice as well as ultimate construction and commissioning.

According to ARENA, the project is well-positioned to investigate a large-scale renewable hydrogen production plant that might decarbonise Gladstone’s industrial base and generate an export sector.

Stanwell’s renewable energy portfolio will facilitate Power Purchase Agreements (PPAs) with Queensland wind and solar farms for hydrogen generation and liquefaction.

ARENA CEO Darren Miller stated that Australia is well-positioned to benefit from Asian export potential, but it will need to rapidly establish large hydrogen production and export facilities at a globally competitive price.

“Stanwell’s project represents a near-term renewable hydrogen production opportunity at globally significant scale. The development of a renewable hydrogen hub in Gladstone could help decarbonise heavy industrial facilities in the region and create an export supply chain between Australia and Japan and Singapore,” Miller said.

“We’re looking to gain valuable learnings around the current cost of producing hydrogen from renewable energy at large-scale. This understanding is critical to scaling up hydrogen production in Australia and developing both the domestic and export industry for renewable hydrogen in line with Australia’s ambitions,” Miller added.

Stanwell CEO Michael O’Rourke said: “We are immensely grateful for the continued support that ARENA has provided to the CQ-H2 project. Their support has been instrumental in getting us to this important point, and this funding will be a vital foundation for the next steps of this journey on which we continue to move forward together – empowering Australia’s hydrogen economy.”

The FEED study is scheduled to be finished by mid-2024. At its height, the CQ-H2 project would provide an estimated 8,900 jobs.