Japanese gas firm Osaka Gas has joined Australia’s Desert Bloom green hydrogen project as a partner, working on project management, offtake development and procurement.

The Desert Bloom project is being developed by Australian technology company Aqua Aerem in the country’s Northern Territory and will produce 410,000t/yr of green hydrogen for domestic use and export from 2023. Construction will commence in 2022, pending FID.

The project aims to produce hydrogen for less than $2/kg by 2029 and has been granted ‘major project status’ by the territory’s government to help streamline the approval process. Aqua Aerem is holding discussions with potential offtakers.

$2/kg – Desert Bloom’s target cost of green hydrogen by 2029

“We are pleased to be collaborating with Osaka Gas on the further development of Desert Bloom Hydrogen, which is the most advanced, shovel-ready green hydrogen project in Australia,” says CEO of Aqua Aerem Gerard Reiter.

“This deal is a strong endorsement of the massive value of the project and Aqua Aerem’s innovative air-to-water technology.”

The project will capture the amount of water required for its processes from the air using a series of the firm’s modular 2MW hydrogen production units. Aqua Aerem says the technology will open the door for green hydrogen projects to be located in desert areas with good solar resources.

The venture is backed by clean energy investor Sanguine Impact Investment. Sanguine is in the process of raising finance to increase the scale of the project from 10GW to 20GW.

Gladstone hub

Momentum is also building for green hydrogen projects in Gladstone, one of seven potential hubs identified in Australia’s national hydrogen strategy.

The H2 Hub Gladstone project in Queensland has also been granted major project status by the state government this week. The 3GW green hydrogen hub is being developed by Australia’s Hydrogen Utility and aims to produce 5,000t/d green ammonia. The project expects to commence operations in early 2024.

5,000t/d – H2 Hub Gladstone’s target green ammonia production

H2 Hub Gladstone has also signed a non-binding agreement with explosives manufacturer Orica to jointly develop an exclusive domestic green ammonia offtake and supply agreement. The two firms will also explore the possibility of developing a green ammonia export terminal at the port of Gladstone using existing Orica ammonia storage capacity and associated infrastructure.

The Queensland government-owned Stanwell Corporation is leading an Australian-Japanese consortium looking to build a 3GW hydrogen production facility at Aldoga, just outside Gladstone. And Fortescue Future Industries has also struck a cooperative agreement with the Queensland government to develop an electrolyser factory in the area.

National strategy

Australia has set aside A$850mn ($635mn) to invest in hydrogen technologies as part of its 2022-23 budget as the nation looks to become a major exporter of the fuel. The country aims to develop regional hydrogen hubs in Gladstone, Darwin, Tasmania, the Eyre Peninsula, Pilbara, the Latrobe Valley and the Hunter Valley.

Green hydrogen production costs are expected to decline to A$2-4/kg ($1.5-2.2/kg) by 2030, according to the latest State of Hydrogen report from the country’s Department of Industry, Science, Energy and Resources.

Japanese firms have signed a number of provisional agreements with Australian companies as the nation looks to secure supplies of hydrogen.

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Author: Tom Young