Sinopec has admitted that the problems at its existing 260MW Kuqa green hydrogen project in northwest China — first revealed publicly by Hydrogen Insight last month — will not be fully resolved until late 2025.
The Chinese oil giant has also inadvertently pointed out that the facility in the Xinjiang region — the world's largest — is only operating at about 20% of its planned capacity.
As Hydrogen Insight exclusively revealed, the alkaline electrolysers at the plant, which have been supplied by three different Chinese manufacturers (Cockerill Jingli, Longi and Peric), all have their own technical problems, but share the same problem — they cannot safely produce hydrogen when receiving electricity that results in the production of less than about 50% of its maximum output, according to research house BloombergNEF (BNEF).
This is a major problem when the 260MW of electrolysers are directly powered by 361MW of solar power (and wind energy bought from the grid at added cost), and has resulted in far lower production levels than the 20,000 tonnes of green hydrogen expected annually.
In what has widely been reported in China as a response to BNEF’s findings, Sinopec issued two statements on Christmas Day on the Chinese social network website Weibo, which attempted to change the narrative on the project.
“As of December 21, the project has been operating smoothly for 4,200 hours, with a cumulative 22.36 million cubic metres of green hydrogen transported to the end-user Tahe Refining and Chemical [a Sinopec subsidiary],” the company posted.
That means that just over 2,000 tonnes of green H2 were produced in a little under six months — roughly 20% of the project’s expected output, on a pro rata basis.
Sinopec added: “As the Tahe refining and chemical production unit completes its capacity expansion and transformation, the green hydrogen transportation volume [to the refining site] will gradually increase, and it is expected that by the fourth quarter of 2025, the hydrogen transmission volume will reach 20,000 tonnes/year.”
This statement suggests that it will be more than 18 months before Kuqa’s problems are resolved — making the project’s completion more than two years late — while pinning the blame on the offtaker, Sinopec Tahe.
Indeed, Sinopec is suggesting that its own subsidiary was not prepared to receive the 2,000 tonnes of green hydrogen produced at Kuqa.
Of course, even if the Tahe facility could not take the lower-than-expected output from the Kuqa project — which would be a major, easily avoidable planning failure — why would Sinopec choose to stop production rather than selling any excess hydrogen on the open market?
But according to BNEF analyst Xiaoting Wang, the opposite is true.
Tahe has shut down its grey hydrogen production facility in order to receive the green H2, and is “really annoyed” with the Sinopec subsidiary in charge of the Kuqa facility as it cannot get the amount of hydrogen it needs for desulphurisation.
Kuqa is not due to be the world’s largest operational project for much longer. Another Sinopec project that is about a third larger is already under construction in Ordos, Inner Mongolia, China, but it is not known when that will be completed, and the company has also announced a ¥20bn ($2.8bn) green hydrogen project in Inner Mongolia that will pump 100,000 tonnes of H2 a year through a new 400km pipeline to Beijing.