When New Zealand’s state-owned electricity utility Meridian Energy decided to develop the 600MW Southern Green Hydrogen facility in the country’s southernmost region and produce 500,000 tonnes of green ammonia per year, it sought out a more experienced developer to partner on the project through a competitive bidding process.

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After announcing a shortlist of two — Australian oil & gas producer Woodside Energy and Australian green hydrogen developer Fortescue Future Industries (FFI) — Meridian revealed yesterday that it had selected the fossil-fuel company as its new development partner on the project, which will reportedly cost A$4.5bn ($3bn) to build.

Experience may have won out. Despite FFI being arguably the world’s most ambitious green hydrogen developer, with plans to produce 15 million tonnes of H2 annually by 2030 and multiple gigawatt-scale projects under development around the world, the company led by Australian iron-ore billionaire Andrew Forrest is yet to begin construction on any of them — or even make a final investment decision.

“Woodside was selected after an extensive competitive bidding process based on its capability and experience in operations process safety and liquids marketing,” Meridian said in a statement.

The company, formerly known as the Electricity Corporation of New Zealand, has been transparent about the bidders competing for the project, publishing a shortlist of four in February — including Linde-owned industrial gases engineer BOC and a Japanese consortium consisting of investment firm Mitsui and energy company Eneos — both of which did not make it to the final round.

However, Meridian revealed yesterday that Mitsui had effectively been brought back into the fold, saying that it is “also in discussions to join the project and “develop the potential market for ammonia offtake, with the aim of creating a world-class collaboration that covers the full hydrogen and ammonia supply chain”.

In what could be seen as a further snub to FFI, Mitsui — which has 50 years’ of experience in the ammonia industry — will now work alongside Meridian and Woodside on front-end engineering design (FEED) for the project.

Meridian chief executive Neal Barclay said: “In addition to its operational and marketing expertise, Woodside has demonstrated climate change ambitions, and as we are a 100% renewable energy company and committed to sustainability, that was a key focus for us in selecting a partner.”

Woodside’s latest financial results, for the third quarter of 2022, show that almost all of the company’s revenues came from its oil & gas operations, and that is still investing hundreds of millions of dollars on fossil-fuel exploration.

Woodside chief executive Meg O’Neill said: “Woodside brings the technical skill and operations experience to develop this project at pace to meet customer demand for hydrogen, which we expect to grow in the energy transition.”

The original partner in the project, New Zealand energy company Contact, has since pulled out, Meridian said in the statement.

FFI was not available for comment on Tuesday.