US supermajor Chevron announced plans Thursday to acquire equity interest in ACES Delta, a joint venture between Mitsubishi Power and Magnum Development, a Haddington Ventures portfolio company, to produce green hydrogen out of Delta, Utah.

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The Advanced Clean Energy Storage project initially plans to produce green hydrogen for low emission electricity, while Chevron’s New Energies division, launched in July to focus on low-carbon business opportunities, is working to build demand for hydrogen in the transportation and industrial sectors.

“Chevron New Energies was created to grow new competitive business lines in areas like hydrogen,” said Chevron New Energies president Jeff Gustavson.

Jeff Gustavson, president of Chevron New Energies. Photo: Chevron

“The potential to partner with Mitsubishi Power and Magnum Development on the Advanced Clean Energy Storage project presents an exciting opportunity that would bring together our unique strengths and would provide a scalable platform to supply our customers with affordable, reliable and ever-cleaner energy.”

A Chevron spokesperson told Upstream the deal is likely to be finalised in the fourth quarter 2021 or first quarter 2022.

The proposed hub would use 1000 megawatts of electrolysis to produce 450 tonnes per day of green hydrogen. The hydrogen would be stored in salt caverns that can hold more than 5500 tonnes of hydrogen.

Storing the hydrogen in the caverns allows it to be dispatchable and cost effective. The hub could potentially grow to become a regional supplier of hydrogen as pipelines are built out.

Green vs Blue

Blue hydrogen is produced from natural gas feedstocks, with the carbon dioxide by-product from hydrogen production captured and stored. However, the process is not emissions free.

Green hydrogen is made using electrolysis powered by renewable energy to split water molecules into oxygen and hydrogen, creating an emissions-free fuel.

“For several years, we’ve been working with early adopters of green hydrogen in the power sector that have easy access to salt domes or existing hydrogen infrastructure, such as the Intermountain Power Agency and Magnum Development,” said Mitsubishi Power Americas chief executive Paul Browning.

“Now it’s time to connect massive geologic hydrogen storage in Delta, Utah, to power, transportation and industrial users throughout the western United States. Chevron’s footprint and expertise in the transportation and industrial sectors make them an ideal partner for this next phase of expansion.”