The Woodside Petroleum Limited (ASX: WPL) share price will be in focus today. This comes following the Western Australian government's backing for the energy company's hydrogen project.
At the time of writing, the oil and gas company's shares are down 1.64% to $22.26.
Woodside pushes ahead with plans despite Fortescue objection
Last month, Woodside revealed plans to build a $1 billion hydrogen and ammonia plant in Kwinana, south of Perth. However, this has been met with opposition by Fortescue Metals Group Limited (ASX: FMG) over the project's green credentials.
The facility aims to produce 1,500 tonnes of hydrogen every day to export in the form of ammonia and liquid hydrogen. Woodside hopes to supply green energy from the hydrogen plant into Western Australia's electricity grid. This would make the facility one of the largest in the world when running at full capacity.
The state government wants to make hydrogen more readily available to achieve net zero emissions by 2050.
Fortescue subsidiary, Fortescue Future Industries isn't happy about Woodside's developments. It claims that while most ammonia manufacturers are using less gas to make hydrogen, Woodside has gone in the opposite direction. Two-thirds of the hydrogen created will come directly from gas, a significant carbon emitting pollutant.
This strangely enough works against the government's target to become carbon neutral in the future.
On the other hand, Fortescue is aiming to make 15 million tonnes of green hydrogen each year by 2030. The company has been progressing its $1 billion plant in Gladstone, Queensland.
In addition, the miner is developing large wind and solar projects across its Pilbara operations in Western Australia. The push for creating clean and renewable energy comes at a time where demand for iron ore could sink. This is particularly concerning for Fortescue given it produces lower grade ore compared to BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).
About the Woodside share price
The Woodside share price is up around 15% over the last 12 months, but flat when looking at year-to-date. The company's shares took a dive to $14.93 when COVID-19 put the global economy at a standstill. However, gradually its shares began to rebound since then.
Woodside commands a market capitalisation of roughly $21.58 billion, with 969.63 million shares on its registry.
