Two state-owned energy firms — India’s Bharat Petroleum Corporation and Singaporean power company Sembcorp — have agreed to form a joint venture focused on producing green hydrogen and its derivatives, as well as renewable energy.
Bharat Petroleum had late last week filed a notice with the National Stock Exchange of India to announce that its board of directors had given the green light for the 50:50 joint venture, subject to regulatory approvals.
Earlier this year, Sembcorp had signed a raft of early-stage agreements to ship vast quantities of clean ammonia produced in India to offtakers in Japan from the late-2020s onwards.
Shipping firm NYK had agreed to transport 200,000 tonnes of NH3 a year for Sembcorp, while Sojitz and Kyushu Electric Power had promised to sell volumes of the chemical on to other companies in the Kyushu region of southern Japan in the latter half of this decade.
Sembcorp had also awarded a contract for front-end engineering and design for a green ammonia plant to EPC firm Tecnimont and its green-hydrogen-focused sister company NextChem, although further details remain murky.
Japan is generally expected to be a major importer of clean hydrogen and its derivatives such as ammonia, given a strong level of political support.
The Japanese government has previously announced that it will this year launch its first auction for Contracts-for-Difference subsidies for both domestic production and imports, covering the gap between how much prospective offtakers currently pay for fossil fuels and the additional cost of low-carbon H2 or its derivatives.
However, given Japan has been relatively agnostic as to the source of hydrogen as long as it meets a carbon intensity threshold of 3.4kg CO2-equivalent per kilogram of H2, this auction could end up favouring blue hydrogen projects, which are expected to produce molecules at a lower cost than electrolyser-based facilities.
