BP, Rio Tinto in carbon capture JV
23 May 2007
Hydrogen Energy will be headquartered in Weybridge, England and have a staff of 75 seconded from the parent companies. Lewis Gillies, formerly head of BP’s hydrogen power business, is to be chief executive of Hydrogen Energy, with Peter Cunningham, formerly Rio Tinto’s head of business evaluation, to serve as chief financial officer.
Rio Tinto will pay BP around $32million to enter the JV, while BP’s existing hydrogen-fuelled power projects in Peterhead, Scotland and Carson, California will become part of Hydrogen Energy. The JV’s projects will typically use coal or petroleum coke as feedstock; although in some cases natural gas may be used, said BP.
Hydrogen Energy will combine Rio Tinto’s expertise and assets in coal extraction and supply with BP’s expertise in chemical processing, low carbon power generation and carbon capture and storage, according to a 17 May joint statement.
Initial projects are likely to be based on non-coal feedstocks, but “will be significant building blocks in the development of coal gasification on an industrial scale,” according to Tom Albanese, chief executive of Rio Tinto.
Delivering carbon emission reductions requires companies to work both together and alongside governments, believes Tony Hayward, BP group chief executive. The new JV, he said, “will allow us to accelerate the development and deployment of these important new technologies and projects.”
Decarbonised energy projects involve converting fossil fuels such as coal, petroleum coke or natural gas, to hydrogen and carbon dioxide gases. The carbon dioxide is captured and stored in geological formations.
According to BP, the hydrogen would be used to fuel a gas turbine for generation of industrial-scale supplies of electrical power, while the integrated CCS technology would ensure that 90% of the carbon dioxide emissions would be captured.
In 2005, BP, together with Scottish and Southern Energy, announced plans for its first hydrogen power project, in Peterhead, which could be in commercial operation in 2011. The planned project would use natural gas as a feedstock, generating some 475MW electricity and capturing and storing some 1.8 million tonnes of CO2 a year in the North Sea Miller oilfield.
Injection of the CO2 into the oilfield would also increase recovery of oil from the reservoir by an estimated 50-60 million barrels. Engineering design for the project is complete and the partners hope to take part in a UK government competition to select which such project to support.
The Carson hydrogen power project would use petroleum coke as feedstock. BP and partner Edison Mission Group announced plans to develop the 500MW power project alongside BP’s Carson refinery, near Los Angeles. The project would capture some four million tonnes of CO2 a year and transport it for reinjection into geological formations in southern California.
Subject to the successful outcome of engineering studies and appropriate policy being in place, it is anticipated the final investment decision could be taken in time for the plant to be operational by the end of 2012.
