- Woodside released an update on its H20K hydrogen plant today
- The company says it has signed a contract for FEED engineering services at the site
- Woodside hopes to have an investment decision by 2022 and first liquid hydrogen by 2025
- Shares in the hydrocarbons giant are edging higher today less than 1% in the green.
Shares in hydrocarbons giant Woodside Petroleum Limited (ASX: WPL) are struggling today, trading 0.28% in the red at $25.17.
Investors are showing a muted reaction to an update released out of Woodside’s camp today covering its H2OK liquid hydrogen production facility proposed for operation in Oklahoma.
Whilst the update isn’t price-sensitive at all, the Woodside share price has regained momentum these past few weeks. So let’s take a look at what was announced.
Woodside awards contract for FEED engineering
Woodside advised today that it has entered front-end engineering design (FEED) on a hydrogen project for the first time. The move comes after it awarded a contract in late December for FEED engineering services to Kellogg, Brown & Root LLC for its proposed H2OK project.
Phase 1 of the project involves construction of a 290-megawatt (MW) facility, producing up to 90 tonnes per day (tpd) of “liquid hydrogen through electrolysis, targeting the heavy transport sector”.
Woodside says the location offers the capacity to expand production up to 550 MW and 180 tpd, and that the “FEED phase” is a significant project development milestone.
Advancing the project past this point activates a series of milestone triggers that further mature the project scope, cost and schedule to make a final investment decision, per the release.
The company says it is targeting a final investment decision on H2OK in 2H 2022 and is aiming to produce the first liquid hydrogen in 2025.
The FEED update follows a suite of series of updates outlining Woodside’s expansion into the US, where it has recently signed collaborations with Hyzon Motors and green energy technology player Heliogen.
Aside from that, the price of Brent Crude oil spot and futures – where more than 90% of oil is priced from – has climbed more than 11% since the beginning of 2022.
Oil is now trading back above 3-year highs and is at multi-year highs when separating out the 2018 rally, a fact that bodes in well for the Woodside share price.
Speaking on the announcement, Woodside CEO Meg O’Neill said:
We are excited about the H2OK opportunity, given H2OK’s strategic location close to national highways and
the supply chain infrastructure of major companies already looking for reliable, affordable and lower carbon
sources of energy. Coupled with our recently announced target to invest US$5 billion in new energy products and lower carbon services by 2030, this FEED entry supports Woodside’s strategy to thrive through the energy transition.
The Woodside share price has started the year strongly, having climbed more than 15% in that time and rallying 8% in the last week alone.