Sept 6 (Reuters) - ConocoPhillips, one of the largest U.S. independent oil producers, will provide natural gas and manage a carbon capture and storage facility for a proposed U.S. hydrogen gas project to be jointly developed with Japan's largest utility JERA, the companies said on Monday.
The agreement to supply gas for hydrogen, a potential clean fuel for electricity production, marks a new avenue for natural gas producers. Several companies, including Conoco, have lined up long-term supply contracts with liquefied natural gas (LNG) developers that supply utilities.
A study to determine the hydrogen project's feasibility could be complete by year-end, according to JERA, the Japanese gas and electricity firm behind the plant. It aims to produce hydrogen from natural gas and convert it into exportable ammonia for sale in the U.S., Europe and Asia.
“JERA and ConocoPhillips will be a low-cost ammonia supplier to domestic and international markets," said JERA Americas Chief Executive Steven Winn. The plant could be in operation within five to eight years at a site along the U.S. Gulf Coast.
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A Conoco spokesman declined to discuss the company's role in the project and the size of any potential investment.
The oil and gas firm has outlined investments in multi-billion-dollar U.S. and Qatari LNG projects. It also is evaluating a carbon capture facility for a LNG plant being developed by electricity and gas provider Sempra. read more
JERA Americas, a U.S. arm of JERA, said the company, Germany's Uniper SE and ConocoPhillips aim to initially produce 2 million tonnes of ammonia per year and could expand to 8 mtpa. Ammonia typically is used to make fertilizers but offers a low-carbon fuel that could be burned to produce electricity.
JERA is considering several sites along the Gulf Coast for the hydrogen, ammonia and CCS site, a spokesperson said, powered in part by JERA's U.S. renewable energy operations.
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