'Technically feasible': This ASX energy giant is preparing to be a hydrogen highway

APA has taken one step closer to hydrogen success.

| More on:
Hydrogen bubble in green

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • APA is the owner of Australia’s largest gas pipeline, transporting half of the country’s usage
  • It’s working on whether it will be able to transport hydrogen in its pipes in the future
  • The energy infrastructure business said it’s technically feasible

The APA Group (ASX: APA) share price is up today after the ASX energy infrastructure business announced some promising news relating to its hydrogen endeavours.

APA currently has a national network of natural gas pipelines around Australia, transporting half of the nation's natural gas usage.

The business has been looking to future-proof itself by considering the possibility of transporting hydrogen through its pipelines. Today's announcement revealed a promising development.

Successful hydrogen experiment

APA announced that its first potential conversion of a gas transmission pipeline to a pure hydrogen service is a "step closer". It successfully completed laboratory testing of Parmelia gas pipeline materials in a pressurised hydrogen environment.

This research is testing the ability of a 43km section of the Parmelia gas pipeline in Western Australia to carry up to 100% hydrogen.

The research, partly funded by the WA Government's renewable hydrogen fund, showed that the existing 43km section of steel transmission pipeline can "technically transport pure or blended hydrogen through the pipeline without reducing the operating pressure."

The main reason for the research is to "understand and quantify the effect of hydrogen on a section of Parmelia gas pipeline material, so the safety and operating efficiency of the pipeline can be adequately assessed."

APA has developed a screening tool for its pipelines that provides a high-level assessment of the pipeline's readiness for hydrogen based on "key pipeline material and operating characteristics."

What could this mean for APA's gas pipeline network?

APA believes that it shows potential for its existing gas transmission pipeline network to "play an important role in connecting hydrogen production hubs to industrial sites across the nation."

APA CEO Adam Watson said in an Australian first, research indicated that it was "technically feasible, safe and efficient to convert the 43km section of the Parmelia Gas Pipeline into a 100% hydrogen service".

Watson said:

APA's 15,000 kilometres of gas pipelines are linked and adjacent to some of Australia's best geographical areas for both blue and green hydrogen production. This research provides us with the knowledge that can be used to assess the potential future role they could play in providing a hydrogen supply service.

For the remainder of APA's pipelines, which consist largely of high strength steel pipelines operating at higher pressure, further research and materials testing will be required to determine if any changes in operating pressure are needed to maintain pipeline integrity whilst transporting hydrogen.

Watson said after the Pipeline Screening Tool was applied, the company would need to undertake "detailed assessment and testing" of each specific asset, as well as customer equipment.

The research can now move onto stage three, which includes "detailed safety studies and conversion plans, ahead of moving to the delivery phase."

Progress with Wesfarmers 

APA also gave a small update about its progress with Wesfarmers Ltd (ASX: WES).

A year ago, APA and Wesfarmers chemicals, energy and fertilisers (WesCEF) signed an agreement to undertake a pre-feasibility study to assess the viability of producing and transporting green hydrogen through the Parmelia gas pipeline to WesCEF's production facilities in Kwinana.

APA said the pre-feasibility studies were "promising", with the results demonstrating that the Parmelia gas pipeline study area "likely to be suitable for green hydrogen development. APA and WesCEF are now considering whether to progress to a feasibility study."

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Energy Shares

Why is the Beach Energy share price racing higher on Thursday?

This energy producer delivered some big news this afternoon.

Read more »

A person is weighed down by a huge stack of coins, they have received a big dividend payout.
Energy Shares

Own Ampol shares? Get ready for your monster dividend payment

Ampol investors are about to enjoy their largest-ever dividend.

Read more »

A man sees some good news on his phone and gives a little cheer.
Energy Shares

Buy Woodside shares for a 20% gain and 4.5% dividend yield

Morgans thinks investors could get big returns from this energy giant.

Read more »

Woman holding $50 notes and smiling.
Dividend Investing

A 36% yield from this ASX dividend share? Here's how these forward-looking investors made it happen

Some savvy passive income investors are earning a 36% yield from this ASX dividend star.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

Happy coal miner.
Energy Shares

How these ASX 200 energy shares could unexpectedly burn brighter

ASX 200 energy shares are facing rising global demand for their products.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

ASX energy shares losing charge amid fresh warnings of gas supply shortfalls

Many energy commodity prices fell overnight and this is hitting ASX energy shares today.

Read more »

A miner stands in front oh an excavator at a mine site
Energy Shares

'We have reached a bottom': 5 ASX uranium shares leaping higher this week

ASX uranium stocks have enjoyed explosive share price growth over the past year.

Read more »