Nel wins $56m electrolyser order for 290MW US green hydrogen project — helped along by new H2 tax credits
But the Norwegian OEM is only supplying 150-170MW to Australian oil company Woodside Energy’s liquid H2 facility in Oklahoma, Hydrogen Insight understands
Norwegian manufacturer Nel has won a NKr600m ($56m) order from Australian oil company Woodside Energy to supply alkaline electrolysers for a 290MW green hydrogen project in the US state of Oklahoma.
Despite announcing the deal, Woodside says it will not make a final investment decision on the project, known as H2OK, until next year.
Nevertheless, Australia’s largest oil & gas company said the order was an “important step forward” for H2OK and the company’s plans to build a “new energy” business in the US.
“With the passage of the Inflation Reduction Act [IRA], the drive to accelerate the energy transition in the US is underway, and Woodside aims to be part of that,” said the company’s executive vice-president for new energy.
The IRA offers tax credits of up to $3/kg for clean hydrogen, depending on the lifecycle greenhouse gas emissions of each project.
“Woodside intends for H2OK to be a net-zero project,” the company said in a statement. “Power will be sourced from Oklahoma’s existing network, a large portion of which is wind-powered, and Renewable Energy Certificates will be used to abate any remaining emissions.”
“Under this contract, we will deliver additional equipment such as technology to regulate gas and liquid loops in the system. Although it is fair to assume the system is slightly smaller than 200MW, the margins are better.”
The electrolysers will be manufactured at Nel’s fully automated 500MW factory in Herøya, Norway.
"The electrolyser market is developing favorably for Nel. We are now securing quality contracts with favorable terms and a manageable risk profile. The contract with Woodside will have a substantial positive financial impact on the company", said Nel CEO Håkon Volldal.
Company shares rose 5.5% on Monday, upon news of the order.
Woodside describes H2OK as a “liquid hydrogen production facility” that will be built at the Westport Industrial Park in Ardmore, Oklahoma.
“Subject to approvals and customer demand, H2OK would involve construction of an initial 290MW electrolysis facility, producing up to 90 tpd [tonnes per day] of liquid hydrogen for the heavy transport sector, with potential expansion to 550MW and 180 tpd.”
Woodside says the site is a “strategic transport and supply chain corridor with potential for customers to adopt hydrogen for a range of uses”. These include heavy-duty trucks, warehouse forklifts, heavy-duty equipment, ground support equipment and fuel-cell microgrids for warehouses and data centres.
The Perth-based company announced in December that it secured a lease at the project site, along with an option to buy the land, and that the project would begin producing liquid hydrogen in 2025.
“H2OK would be located in a highly prospective part of the US market, close to national highways and the supply chain infrastructure of major companies that have signaled their interest in securing reliable, affordable, and lower carbon energy,” Woodside CEO Meg O’Neill said at the time.
While many gigawatt-scale green hydrogen projects have already been announced, only 256.9MW of electrolysers are currently operational around the world, according to Rystad Energy.
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