May 24, 2023

Joint development agreement for low-carbon hydrogen production in the vicinity of the Bacton gas terminal in the UK

Sumitomo Corporation and its wholly-owned subsidiary Summit Energy Evolution Limited (SEEL), have been involved in a feasibility study for the establishment of a hydrogen value chain centered around the Bacton gas terminal in the UK which will provide a significant contribution towards UK targets for the establishment of a sustainable hydrogen economy and decarbonization at local and regional scales.

SEEL has recently signed a joint development agreement with Progressive Energy Limited (PEL), who have a proven track record in low-carbon hydrogen production projects in the UK, to progress a CCS-Enabled Hydrogen Production Project at Bacton with the aim to reach a final investment decision in the late 2020s with the start of CCS-Enabled hydrogen production in 2030.

The carbon neutrality project in the Bacton area of the UK

The Bacton gas terminal, located in the southeast of the UK, is a large-scale natural gas gathering point that handles about one-third of the UK's natural gas production. The UK government is promoting clean energy conversion projects throughout the country and recently facilitated an industry led Special Interest Groups to look at a project around the Bacton area to build a value chain for consistent hydrogen production, storage and transportation.

Conceptual diagram of this project
the Bacton gas terminal in the UK

In this project, under the leadership of the UK Oil and Gas Regulator the North Sea Transition Authority (NSTA), five Special Interesting Groups (SIG) were established to examine hydrogen supply and demand scenarios and verification of major infrastructure to confirm the potential of the project which is planned to produce carbon capture and storage (CCS) enabled hydrogen made by natural gas and green hydrogen by using offshore wind power. Sumitomo Corporation and SEEL had been leading the research with regards to hydrogen production as the lead company in the hydrogen supply SIG. Based on the results of the investigations conducted by each SIG, it has been determined that there is likely to be sufficient demand for hydrogen in the surrounding areas and nationally to support the development. There is a possibility that the existing gas pipelines can be used for transportation and there are expected to be readily available CCS sites located offshore in depleted gas field adjacent to the Bacton terminals. As a result, the Project is positioned to be one of the promising projects likely to qualify for UK Government support under its Hydrogen Economy support mechanism proposals and the Net Zero Hydrogen Fund.

*Each SIG and Leading Company

  1. Hydrogen Demand SIG (Leading Company: Progressive Energy Limited (UK))
  2. Hydrogen Supply SIG (Leading Company: Sumitomo Corporation Group)
  3. Infrastructure SIG (Leading Company: Xodus (UK))
  4. Supply Chain & Technology SIG (Leading Company: Petrofac (UK))
  5. Regulation SIG (Leading Company: Storegga (UK))

Collaboration with PEL to Achieve Large-Scale Low-Carbon Hydrogen Production

PEL is one of the leading companies in low-carbon hydrogen production business and has been involved in other advanced low-carbon hydrogen production projects in the UK. By combining PEL's deep expertise in low-carbon hydrogen production with Sumitomo Corporation Group's experience in business development and operation in various industries, PEL & Sumitomo Corporation Group aim to start producing CCS enabled hydrogen (50 thousand tons/year) by 2030 with succession planning to electrolytic hydrogen using renewable power generation. At the time of signing this contract, Stuart Payne, CEO of the NSTA of the UK government stated that

"This is an important step forward in supporting UK energy security and the drive to net zero by creating a low-carbon hydrogen hub at Bacton.
The Bacton project, which we got underway in 2020, could provide decades of clean energy for up to 20 million homes, along with supporting carbon storage and wind power, and creating skilled jobs as part of the energy transition.
We wish this project every success and will continue to support it, and others to come, as they develop."

Sumitomo Corporation Group's Next-Generation Energy Business

Sumitomo Corporation Group positions hydrogen as one of the important future energy sources for decarbonizing society. We are actively engaged in multi-faceted hydrogen-related business development, including regional hydrogen production and consumption based on local characteristics, large-scale hydrogen value chain businesses promoting the mass production, transportation, storage, and utilization of hydrogen, as well as investing in new technologies. In the UK, one of the leading countries in decarbonization, we aim to collaborate with global energy companies to achieve regional carbon neutrality. Furthermore, we will accumulate knowledge and experience related to next-generation energy businesses, which is one of the themes of our midterm management plan "SHIFT 2023", to accelerate the creation of new businesses and contribute to mitigating climate change.


Company Profile

Company Name : Progressive Energy Limited
Company Name : Progressive Energy Limited
Headquarters : Gloucester, UK
Representative : Chris Manson-Whitton
Established : 1998
Business : CCS, low-carbon hydrogen business, consulting related to clean energy
Business : CCS, low-carbon hydrogen business, consulting related to clean energy

Company Name : Summit Energy Evolution Limited (SEEL)
Company Name : Summit Energy Evolution Limited (SEEL)
Headquarters : London, UK
Representative : Paul Lafferty
Established : 2021
Business : Low-carbon hydrogen business