Jun 8, 2021

Hydrogen Map shows 57 projects are operational globally

Hydrogen
Energytransition
zerocarbon
PillsburyLaw
Dominic Ellis
2 min
Western Europe and Asia Pacific are driving growth, but US projects are rising, according to Pillsbury Law's Hydrogen Map  

Pillsbury Law has created The Hydrogen Map which tracks more than 200 blue and green projects globally.

Currently there are 57 projects operational and a further 58 will be in development by the end of 2021. Construction of another 92 are slated to begin in the next decade. 

Western Europe and Asia Pacific, which account for more than 83% of known low-carbon hydrogen projects, are driving growth, but US projects are rising. The US is well positioned to lead the green hydrogen economy due to the abundant, low cost renewable energy sources needed to produce it, such as wind, solar, hydropower and nuclear, according to McKinsey.

Green hydrogen projects, which generate hydrogen using zero-carbon sources such as renewables or nuclear power, currently dominate the market, with 52 operational projects.

A hydrogen production facility being built at the Tabangao refinery in Batangas, Philippines is slated to be the first to generate blue hydrogen, in which hydrogen is produced using fossil-fueled sources but the resulting carbon emissions are captured, stored or reused. 

"Low carbon hydrogen and ammonia production is the key to decarbonising the hard-to-decarbonise sectors like transportation, industry and buildings”, said Pillsbury energy partner and Deputy Energy Industry Group leader Elina Teplinsky

"This map will be a helpful tool for a broad audience of policy makers, industry participants and investors, sustainability analysts, advocates and journalists tracking the development of low-carbon hydrogen projects and encourage dialogue between those parties to further accelerate adoption of this transformational technology."

"With governments and enterprises worldwide increasingly prioritising decarbonisation goals, we are laser-focused on helping clients capitalise on the enormous opportunities that the ongoing energy transition presents,” said partner Sheila Harvey, who serves as firm-wide Energy Industry Group leader at Pillsbury and co-leads the firm’s Hydrogen practice. 

Hydrogen practice group co-leader Mona Dajani, who heads Energy & Infrastructure Projects and Renewable Energy teams, said energy demand is driving significant innovation in the hydrogen space.

"Green hydrogen projects, which combine renewable power sources with hydrogen production, are unlocking new possibilities for regions previously constrained by weak grid connections and transmission bottlenecks and marking a crucial step in the development of the green hydrogen business case," she said. 

New Australian clean energy storage startup Endua aims to build hydrogen-powered energy storage and deliver sustainable, reliable and affordable power.

Endua is backed by $5 million in funding, technology and industry expertise from CSIRO, Australia’s national science agency; Main Sequence, the deep tech investment fund founded by CSIRO; and Ampol, the country’s largest fuel network.

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Jun 21, 2021

Magellan, Enterprise and ICE unveil new futures contract

futures
Oil
trading
USA
Dominic Ellis
4 min
The Midland WTI American Gulf Coast contract is being launched in response to market interest for a Houston-based index

Magellan Midstream Partners, Enterprise Products Partners and Intercontinental Exchange (ICE) are establishing a new futures contract for the physical delivery of crude oil in the Houston area.

The Midland WTI American Gulf Coast contract is being launched in response to market interest for a Houston-based index with greater scale, flow assurance and price transparency. It will use the capabilities and global reach of ICE’s trading platform and is due to be launched by ICE by early 2022, subject to regulatory approval. 

The quality specifications of the new futures contract will be consistent with a West Texas Intermediate crude oil originating from the Permian Basin with common delivery options at either the Magellan East Houston terminal or the Enterprise Crude Houston terminal. In support of this new futures contract, Magellan and Enterprise anticipate discontinuing their existing provisions for delivery services under the current futures contracts deliverable at each terminal once the new contract receives regulatory approval and is finalised. 

“Magellan is pleased to join forces with Enterprise and ICE to offer this leading-edge joint futures contract,” said Aaron Milford, Magellan’s chief operating officer. “The new contract improves the transparency, flexibility and marketability of Midland WTI crude oil for Gulf Coast and export customers while maintaining industry-recognized quality and consistency.”

Harold Hamm, Chairman of the Board of Continental Resources and Founding Member of the American Gulf Coast Select Best Practices Task Force Association said on April 20 last year, when the Cushing, Oklahoma WTI contract traded down to -$38, it was a wake-up call to the oil industry that the storage constraints and landlocked location of the Cushing contract could no longer be ignored.

"I started the American Gulf Coast Select Best Practices Task Force to develop specifications for a new US light sweet crude oil price benchmark in the American Gulf Coast, and to advocate for its implementation and adoption as the main pricing point for the US oil markets," he said.

"We think a futures contract in the most interconnected market center in the country, with a widely accepted quality spec, which settles with guaranteed delivery of crude oil is an important new alternative for the industry. The task force has worked tirelessly to create a marker with transparency and liquidity that is waterborne for this modern era. The Midland WTI American Gulf Coast futures contract ... is a huge step forward for the industry and goes a long way to accomplishing the mission on which the task force has been working.”

Brent Secrest, Executive Vice President and Chief Commercial Officer of Enterprise’s general partner, said: “We are excited about this new crude oil futures contract, which features the combined strength of two extensive and complementary networks of midstream assets with a world-class trading platform to provide customers with greater supply reliability, flexibility and price transparency. 

As the market hub for Permian Basin production, Houston represents the most logical choice for a new futures contract. Between Magellan and Enterprise, we offer access to virtually all of the export capacity in the Houston region, redundant connectivity to all area refineries, a robust Gulf Coast storage position and interconnects to all of the relevant supply pipelines, including those owned by third parties.”

Jeff Barbuto, Global Head of Oil Markets at ICE, said combining efforts with Magellan and Enterprise to establish a benchmark for pricing Midland quality WTI on the Gulf Coast allows it to offer the industry a futures contract with over four million bpd of supply capacity from Midland into Houston, access to both domestic and foreign demand, and nearly 60 million barrels of storage capacity in the Magellan and Enterprise systems. 

"Traded on the same global platform as ICE Brent, Murban and Platts Dubai Crude Oil futures contracts, the new Midland WTI American Gulf Coast contract can also offer significant capital efficiencies to the industry and provide industry-leading quality that buyers have grown accustomed to in the Houston market," he said.

According to EIA forecastsglobal consumption of petroleum and liquid fuels will average 97.7 million bpd for all of 2021, a 5.4 million bpd increase from 2020. US crude oil production averaged 11.2 million bpd in March, up 1.4 million on February. 

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