Orica to build hydrogen hub in Newcastle following ARENA funding

Explosives manufacturer Orica has won $432 million in funding from the ARENA Hydrogen Headstart program to build a hydrogen facility at its Kooragang Island operations in Newcastle.

Orica’s Hunter Valley Hydrogen Hub (HVHH) aims to produce and deliver commercial-scale renewable hydrogen to the Newcastle industrial and port precinct.

It will be used to replace natural gas as a feedstock in producing ammonia and ammonium nitrate.

The first phase of the project aims to produce 12 tonnes of renewable hydrogen a day, and is forecast to reduce Orica’s natural gas demand for its chemical manufacturing by about 7.5 per cent, the company said, allowing that gas to be instead used for other domestic consumption.

This phase is expected to produce 26,600 tonnes of ammonia a year, creating 160 job in the construction phase and up to 10 full time, ongoing jobs.

The hydrogen will be created through electrolysis, using recycled water and renewable energy via a grid-connected 50MW electrolyser. The proposed facility received developed approvals in May.

ARENA Chief Executive Officer Darren Miller said hydrogen has an important role to play in decarbonising heavy industry.

“Renewable hydrogen is an important decarbonisation lever for applications like ammonia production where hydrogen has traditionally been produced with fossil fuels,” he said.

“By replacing natural gas-derived hydrogen with clean, renewable alternatives, projects like Orica’s are helping to decarbonise core industrial processes while preserving domestic manufacturing and unlocking new export opportunities.

“ARENA’s Hydrogen Headstart program is designed to fast-track Australia’s renewable hydrogen industry by supporting large-scale projects that are finding ways to reduce emissions, strengthen industrial competitiveness and position the nation as a global leader in clean energy exports. Orica’s project is a great example of what’s possible.”

Orica’s Managing Director and Chief Executive Officer, Sanjeev Gandhi, said there are significant possibilities for renewable hydrogen in Orica’s manufacturing operations, and the potential to support the future of Australia’s hydrogen industry as well as the growth of future jobs and economies in the region.

“Through the Hunter Valley Hydrogen Hub, we hope to further contribute to our domestic and international customers' decarbonisation goals by offering low-carbon products, while supporting Orica’s next phase of decarbonisation,” Gandhi said.

“Orica operates heavy manufacturing sites in a hard-to-abate industry. Such abatement projects are extremely expensive and complex to execute. Ensuring we secure cost competitive gas contracts as a transition feedstock and cost competitive renewable electricity, and recycled water will be critical enablers of this long-term project.

“A supportive regulatory environment and continued collaboration with Government and energy providers is required to solve some of the more complex challenges facing the manufacturing industry in Australia and secure a Future Made in Australia.”

To date, ARENA has allocated around $370 million to 65 renewable hydrogen projects across Australia.

Picture: credit Orica