Commodity storage company Vopak is allocating most of this year’s growth spending budget outside of the oil market, most notably on projects to store and distribute hydrogen, the company said today.

The Netherlands-based firm, which still makes most of its revenue from storing oil and chemicals around the globe, is pursuing more than ten infrastructure projects and studies involving hydrogen or ammonia, it said.

“We believe that hydrogen will ultimately develop into a global traded energy commodity in which Vopak’s infrastructure will play a crucial role to facilitate and balance global supply and demand,” said Eelco Hoekstra, Vopak’s chief executive.

The global hydrogen market could be worth $2.5tn by 2050, according to management consultancy McKinsey and global CEO-led initiative the Hydrogen Council, as the world’s most common element develops into a worldwide-traded commodity and the sale of related equipment takes off.

Vopak expects to spend €300-350mn ($361-421mn) this year on growing its portfolio and said that most of it will go to hydrogen, gas and industrial projects, while investments in oil infrastructure will drop. Last year, it spent €525mn on growth projects, around half of which went to the oil and chemical segments, while only 10-15pc was spent on new energies, gas and feedstocks.

“We believe that hydrogen will ultimately develop into a global traded energy commodity in which Vopak’s infrastructure will play a crucial role” Hoekstra, Vopak

“We focus our business development efforts on opportunities in hydrogen and other liquids that can store energy,” Hoekstra said in the company’s full-year results presentation.

Like many of its customers in energy and chemicals, Vopak is impacted by the energy transition and forced to adjust its business accordingly. It has set itself the ambition to become climate neutral by 2050.

“Excess renewable hydrogen that is not locally consumed will be moved regionally, and later on globally. Hydrogen import infrastructure will be required to accommodate these hydrogen production flows,” said Hoekstra.

Vopak is already involved in projects assessing the viability of hydrogen imports to the Netherlands and Germany from areas in southern Europe, Morocco, the Middle East and South America. “In the second half of this decade our aim is to invest sizeable amounts in infrastructure to facilitate large-scale imports and distribution of hydrogen and ammonia,” Hoekstra added.

The company is well placed to benefit from growing hydrogen trade routes, with storage presence in all major energy trading hubs. It already owns and operates several ammonia and methanol storage sites globally, including in China, the US and Singapore. In the last of these, Vopak is also involved in a project exploring the use of hydrogen to power local data centres.

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Author: Karolin Schaps