The Woodside Petroleum Limited (ASX: WPL) share price is edging higher in early trading today, up 0.77% to $22.18.
It comes after the oil and gas giant issued a media release advising it had secured land for its proposed H2TAS hydrogen plant in Tasmania.
The H2TAS plant is a phased development that has the potential to support up to 1.7 gigawatts (GW) of electrolysis for hydrogen and ammonia production, says Woodside.
It will use a combination of hydropower and wind power to create a "100% renewable ammonia product for export as well as renewable hydrogen for domestic use".
Here are the details out of Woodside's camp today.
Proposed hydrogen and ammonia plant
For a quick background, in January 2021, Woodside signed a memorandum of understanding with the Tasmanian government, which outlined its support for the company's H2TAS project.
Following this, Woodside announced in May it had formed a project consortium with two Japanese corporations to examine the feasibility of exporting ammonia to Japan from the Bell Bay port.
The feasibility studies concluded it was economically and technically viable to export ammonia from Tasmania to Japan.
Being that H2TAS is a phased development, the initial phase would have a capacity of up to 300 megawatts (MW) and target production of 200,000 tonnes per annum of ammonia.
This production figure, as Woodside states in the release, is matched to customer demand.
And demand is currently high, given the big pivot of industrialised nations towards renewable and green forms of energy. Hydrogen fits the bill here, as it produces zero carbon emissions when used as a fuel.
As such, Woodside is also trying its hand in the hydrogen game in WA. It recently revealed plans to build a $1 billion facility akin to the H2TAS site in Kwinana, south of Perth.
What does the competition think?
Investors appear to have welcomed the news, judging by the rise in the Woodside share price today. However, not all future vendors of the potential carbon-free energy solution are happy about the moves.
Competitor and green energy forerunner Fortescue Future Industries, subsidiary of Fortescue Metals Group Limited (ASX: FMG), voiced its concerns over the plant's go-ahead.
It claims Woodside's approach cannot be considered green as it will use more gas in the production of hydrogen – around 66% according to Fortescue – rather than depressing its gas use, like most ammonia producers.
Nonetheless, Woodside explained today that H2TAS is "already garnering interest from existing and prospective Woodside customers in Asia and Europe".
Woodside is targeting a final investment decision on the site in 2023. Although, construction and commissioning are expected to take only around 24 months.
What is management saying?
Woodside CEO Meg O'Neill said the proposed site is in unison with the company's focus on new, greener energy projects. She said:
Combined with our landmark H2Perth project announced last month, H2TAS will help to position Australia as a global leader in this emerging industry. Importantly, this project would also create local construction and operational jobs and new opportunities for Tasmanian businesses.
Woodside share price snapshot
The Woodside share price is in the red this year, posting a loss of 3% since January 1.
In the past 12 months it has managed to climb 6% but that's still over halfway behind the benchmark S&P/ASX 200 index (ASX: XJO)'s gain of around 14% in that time.
