Woodside Energy is aiming for a final investment decision this year on a green hydrogen project in Australia after signing an agreement with the Tasmania government that could lead to production in two years.

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The Australian independent on Thursday penned the memorandum of understanding with the Hobart administration that outlines the state government’s support for the proposed H2TAS project, which is aimed to be built at Bell Bay near Launceston.

Woodside has, in parallel with the MoU, signed a non-binding term sheet with Tasmania’s natural gas retailer, Tas Gas, for the pair to develop a framework for the blending — and the potential sale — of green hydrogen into the state’s gas network.

Green hydrogen is hydrogen produced solely from renewable sources.

Net-zero aspirations

Thursday’s MoU was signed by Woodside chief executive Peter Coleman and Tasmania Premier Peter Gutwein.

Coleman said the oil and gas giant is “focused on moving beyond feasibility studies” and has its eye on starting hydrogen production from H2TAS in the first half of 2023, “following a targeted final investment decision in the third quarter” this year.

“Woodside shares the Tasmanian government’s net-zero aspiration and welcomes [its] leadership in supporting the growth of a domestic hydrogen industry,” Coleman added.

“The government has taken concrete actions such as creating the Tasmanian Renewable Hydrogen Action Plan, establishing the Tasmanian Renewable Hydrogen Fund and signing this MoU.”

Tas Gas chief executive Phaedra Deckart, following signing of the term sheet with Woodside, said: “Our networks are relatively new and capable of safely conveying hydrogen, unlike older systems across Australia.”

FEED plans afoot

The proposed H2TAS project is set to be situated in Bell Bay Advanced Manufacturing Zone, a heavy industrial precinct north of Launceston.

The proposal involves a 10-megawatt pilot project producing 4.5 tonnes per day of hydrogen for domestic use, targeting the transportation sector.

The project participants are operator Woodside and Countrywide Renewable Energy.

Upstream reported in October that contracting sources said Woodside hosted an expression of interest briefing in early September for companies interested in being considered for a combined contract, covering the front-end engineering and design followed by the engineering, procurement, construction and installation of the hydrogen plant.

Up to 25 companies participated in the briefing including major oil and gas engineering and construction names such as Advisian, Clough, Doris, GHD, TechnipFMC and Wood.

The next step is that Woodside will select a handful of companies to bid for the FEED-EPCI package, said contracting sources.