Leveraging its existing interests in natural gas, as well as the potential of renewable energies in Egypt and Mauritania, BP is now looking to Africa to realize its global ambitions as a hydrogen producer.
BP's quest to capture 10% of the global low-carbon hydrogen market by 2030 now turns to Africa, where over the past 2 months the supermajor has signed separate memoranda of understanding to explore opportunities to create hydrogen hubs in Egypt and Mauritania.
BP is committed to assessing the technical and commercial feasibility of developing a large-scale green hydrogen production and export center in Egypt in several phases, including a likely study of locations across the country and the identification of best-in-class resources.
Egypt's signatories included the country's New and Renewable Energy Authority, the Egyptian Electricity Transmission Company, the General Authority of the Suez Canal Economic Zone and the Egyptian Sovereign Wealth Fund for Investment and Development.
Egypt and BP announced the deal on December 8, just one day after Cairo signed another agreement with local energy and utilities provider Taqa Arabia and its French partner, renewable energy producer Voltalia, to establish, finance and operate a 150 kilotonnes/year green hydrogen production plant.
The facility, near the port of Ain Sukhna in the Suez Canal Economic Zone, would have a total electrolysis capacity of 1 GW generated from a combined solar and wind power capacity of 2.7 GW. The Egyptian government would provide land for construction, Taqa reported in a press release.
Egypt : East and West export logistics, gas and renewable energies
The Taqa-Voltalia project "builds on our green hydrogen portfolio and complements... our mandate to transform Egypt into a regional hub for green energy," said Ayman Soliman, CEO of the country's sovereign wealth fund, calling the fund "a catalyst (that provides) investors with a multitude of renewable energy sources, an optimal export location and an investor-friendly ecosystem.
A month earlier, BP had signed a memorandum of understanding with Mauritania to explore the technical and commercial feasibility of large-scale green hydrogen production in this northwest African country bordering Algeria, Senegal and Mali.
The signing took place alongside the COP27 climate conference on November 8 in the Egyptian resort of Sharm el-Sheikh, with Mauritanian President Mohamed Ould Cheikh El Ghazouani and Oil, Mines and Energy Minister Abdessalam Ould Mohamed Saleh signing the agreement.
BP CEO Bernard Looney signed for BP, as did the company's executive vice presidents for gas and low-carbon energy, production and operations, and the senior vice president for Mauritania and Senegal.
"We are already developing one of the world's most innovative gas projects with the support of the Mauritanian government," said Anja-Isabel Dotzenrath, executive vice president for gas and low-carbon energy, in a BP press release. "And we now intend to extend our partnership to low-carbon energy by exploring the potential for global development of green hydrogen."
Color wheel: you need blue to make green with time
Green hydrogen rightly gets the press coverage because it's carbon-free, and if the world had already scaled up enough renewable energy - wind, solar and/or nuclear - needed to power the electrolysis technology that could release enough green hydrogen from water, it would be a definite win for the decarbonization agenda.
The problem is that there simply isn't enough renewable energy in place that can be scaled up over time to meet even short-term emissions targets, and to think otherwise is "ridiculous" in the words of the President of the European Energy Research Alliance, Nils Røkke.
Røkke told RefillThe dogmatic view would be that we should focus solely on green (hydrogen)... but then you'd miss all your emissions targets, I'm afraid, because it would take too long. to develop the amount of renewables you'd need to produce hydrogen from (electrolysis).
The solution is to develop blue and green hydrogen simultaneously, in the hope that green hydrogen will become dominant over time, explained Røkke, who is also Executive Vice President for Sustainability at SINTEF, Scandinavia's largest R&D institute.
BP seems to be in line with this strategy. It names blue hydrogen alongside green hydrogen as one of the five growth drivers of the company's declared energy transition currently being pursued in the UK, the Netherlands, Germany, Spain, the Middle East, the USA, Australia and now potentially Africa.
Blue hydrogen is produced when natural gas undergoes a steam reforming process that releases hydrogen but also produces carbon dioxide as a by-product that must be captured and stored using carbon capture and storage technologies.
In Mauritania and Senegal, BP has access to gas with its operator interests in the development of phase 1 of the Greater Tortue Ahmeyim liquefied natural gas (LNG) project along the Mauritania-Senegal border. The project was approved in 2018 and is expected to produce 2.3 mtpa of LNG, with production scheduled over 20 years.
BP has an operator interest of 62% in the BirAllah gas field (Block C8) and the Great Turtle Ahmeyim (Block C12), with Dallas-based independent Kosmos Energy holding a 28% interest and local interests controlling 10%.
Earlier in 2022, BP also signed an exploration and production sharing contract for the BirAllah gas resource in Mauritania, according to the BP website. In Senegal, BP also operates the Saint-Louis Profond and Cayar Profond offshore blocks with a majority interest.
In Egypt, BP claims to currently produce around 70% of the country's gas either directly or through its various partnerships. It operates the West Nile Delta gas development, which currently produces around 900 MMcf/d of gas and 27,000 B/d of condensate.
The company also holds a 10% interest in the Shorouk concession, which contains the super-giant Zohr offshore gas field, the Egyptian equivalent of Israel's Leviathan field in the eastern Mediterranean.