Who cares about how much hydrogen costs? Part 2: Midstream

3 Min Read

Altroleum publishes daily production cost assessments for hydrogen for both Europe and North America, available now. But who should really care about how much hydrogen costs?

Broadly, these stakeholders can be classified into several buckets:

This is the second in a series of articles profiling these stakeholders.

Midstream

Midstream for hydrogen is very much an emerging sector, but is critical to the emergence of hydrogen as a commodity. Midstream refers to transportation and storage of an asset, in this case, hydrogen. Without midstream development, there would be a disconnect between production and end users. A thriving midstream sector relies on healthy levels of production and healthy levels of demand from end users.

Infrastructure for transporting hydrogen is becoming more widespread. There are over 5000 km of hydrogen pipelines worldwide, including over 2000 km in the Gulf Coast region of the United States.

Gulf Coast hydrogen infrastructure

Many existing natural gas pipelines are suitable for conversion to transport hydrogen. An example of such a project is the proposed conversion of the existing gas infrastructure for municipal heating in Leeds, UK to hydrogen.

Hydrogen can often be blended with natural gas in existing pipelines at volumes up to 15% with little to no conversion of the pipeline and then separated downstream.

The first ship to carry hydrogen, ‘The Hydrogen Frontier’, operating between Australia and Japan was commissioned in 2020, designed to carry >1 million litres of liquefied hydrogen. Much larger vessels are being planned for the next decade. Hydrogen can also be compressed or liquefied and transported on trucks.

The Hydrogen Frontier

Hydrogen storage is a rapidly evolving space. Well established technologies include the storage of compressed gas in cylinders and the storage of liquefied hydrogen in tanks. There are a large variety of exciting technologies for storing hydrogen coming to market; these include storing hydrogen as ammonia and converting back to hydrogen, adsorption to porous materials and various other chemical approaches.

Midstream operators need functioning transport and commodity markets to operate at scale. The value of commodities, cost of transport and cost of storage of an asset are linked to both supply side and demand side constraints.

The cost of production of hydrogen is a fundamental driver in determining the price hydrogen is marketed at, and in turn the value of hydrogen transport and storage.

These data can be used to support many workflows in midstream development for hydrogen, from high level strategic decision making at C-suite level through to modelling and validation work undertaken by analysts for individual assets.

Altroleum provides daily hydrogen production cost assessments with the highest temporal and spatial granularity on the market. Altroleum covers all of the well-established production technologies (SMR, SMR w/ CCS, AEM, PEM) and covers geographies across Europe and North America.

A hydrogen price assessment in the Altroleum platform

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