Australia's 3GW CQ-H2 green hydrogen project received 10 million dollars of start-up capital

The CQ-H2 Green hydrogen project in Queensland, Australia, received a cash infusion of A $117 million (including A $35 million from the Australian Federal Government), or about US $76.6 million, to carry out front-end engineering and design work FEED on the project.

The CQ-H2 project has received an interim offtake from Singapore infrastructure company Keppel to make a final investment decision on the multi-billion dollar project, which is scheduled to take place by late 2024.

The remaining A $83 million required to start the front-end engineering and design work will be funded by CQ-H2's project consortium, which includes the Queensland government-owned Stanwell Corporation (Stanwell Corporation is a Queensland government-owned company, Is the state's largest power plant), Japanese conglomerate Marubeni, Kansai Electric Power, Iwatani and Keppel.

The project has changed since the government's feasibility report in 2022 and could require billions of dollars in funding.

The first 100 tonnes per day production phase of the CQ-H2 project will cost A $3.9bn by 2026, with a further A $10.9bn needed to ramp up capacity to 800 tonnes per day by 2031. The project has a financial commitment to build a capacity of 200 tonnes per day in the first phase, but has delayed production until 2028.

According to the feasibility study, about 280MW of electrolytic cells will be installed in the first phase, increasing to 2.1GW by 2031. The CQ-H2 project uses electricity from the grid, but Stanwell Corporation plans to enter into power purchase agreements with wind and solar farms to make CQ-H2's electricity eligible for renewable hydrogen.

In 2021, Stanwell Corporation signed a Memorandum of understanding (MOU) with Acciona, a Spanish company with interests in energy, construction and transportation, to be powered directly by Acciona's 445 MW Aldoga solar farm, Construction of the power plant is due to begin next year at Gladstone northwest.

Outlet of liquid hydrogen and ammonia

The consortium has committed a total of A $17.2 billion in hydrogen exports over the 30-year life of the project, contributing A $12.4 billion to Queensland's GDP.

The CQ-H2 project is intended to export liquid hydrogen from Australia to Japan, but the addition of Singapore's Keppel opens up a second potential market route. Keppel wants to use hydrogen from CQ-H2 as a feedstock for its proposed Gladstone Green ammonia plant, which it is developing with Australian fertiliser maker Incitec Pivot with a view to selling in global fertiliser markets such as Australia, Singapore and the United States.

"By joining the CQ-H2 consortium and partnering with Incitec Pivot, Keppel is one step closer to making green hydrogen and green hydrogen commercially viable energy sources," said Cindy Lim, chief executive officer of Keppel's infrastructure division.

Keppel has pledged that the Gladstone green ammonia plant will produce 850,000 tonnes of ammonia a year for export to Singapore, but has not given a firm timeline on when it will start or even make the final investment decision FID.

Jurong Island, a major chemical and energy industrial zone in Singapore, is one of the top 10 petrochemical centers in the world. The island is home to more than 95 of the world's leading oil, petrochemical, specialty chemicals and supporting services companies) ammonia fuel power plant feasibility studies are currently underway.

When Singapore published its National Hydrogen Strategy in October 2022, it noted that it expected to continue to rely on hydrogen imports rather than local hydrogen production. Hydrogen agency costs in Singapore, especially deployment costs in the power and industrial sectors, are likely to be higher than those in countries that have the capacity to produce low levels of hydrocarbons domestically.