US clean energy developer Bakken Energy is teaming up with a subsidiary of Japanese giant Mitsubishi Heavy Industries to develop, what they claim will be, the largest and lowest-cost, blue hydrogen production facility in the US.

Bakken revealed it had reached an agreement to buy the Great Plains Synfuels Plant in North Dakota from a subsidiary of Basin Electric Power Cooperative, with the deal expected to be completed by 1 April 2023, subject to certain conditions being met.

It comes after Bakken signed an agreement with Mitsubishi Power Americas in June to create a hydrogen hub in North Dakota to produce, store, transport, and locally capture and sequester carbon dioxide.

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Bakken said Monday the Synfuels Plant would form the nucleus of the planned $2 billion hydrogen hub, with plans to redevelop the site to produce an estimated 310,000 tonnes per annum of blue hydrogen within the next five years.

“Driven by our commitment to achieve rapid and large-scale clean hydrogen production, Bakken Energy and our partner Mitsubishi Power have reimagined what is possible and identified the optimal path to leap from blueprint to clean hydrogen production in the shortest time possible,” said Bakken chief executive Mike Hopkins.

“The North Dakota Hydrogen Hub will become a critically important, centrally located hydrogen complex and part of a nationwide, interconnected collection of hubs spanning the country.”

The hproject will use autothermal reforming hydrogen production technology to produce the hydrogen and aims to capture and store 95% of the carbon emissions from the process.

The Synfuels Plant is the only commercial-scale coal gasification plant in the US, converting roughly 18,000 tonnes of lignite coal into an average 150 million cubic feet per day of synthetic natural gas.

Bakken said the Synfuels Plant would continue its current operations through to 2025, with the current employees operating the plant anticipated to be retained when it converts over to hydrogen operations in 2026.

“The North Dakota Hydrogen Hub will lead to the establishment of new industries, create high-paying jobs and the development of new domestic and foreign markets,” said North Dakota Governor Doug Burgum.

“This project illuminates how the power of innovation over regulation can save versus destroy jobs.”

While Bakken said its agreement with Mitsubishi includes locally capturing and sequestering the CO2 from hydrogen production, the Synfuels Plant already has a carbon capture element.

The plant has the capacity to capture up to 3 million tpa of CO2, which is currently sent via a 205-mile (328-kilometre) pipeline to Saskatchewan, Canada, where it is used for enhanced oil recovery operations.

The geologic sequestration of CO2 in the oil reservoir is also monitored by the International Energy Agency (IEA) Weyburn CO2 Monitoring & Storage Project.