Solutions for blue and green hydrogenJune 14, 2021
Philippe Peccard, managing director of Linde Gas & Engineering Middle East, talks to The Energy Year about what needs to be done to unlock hydrogen’s potential and expectations for the Ruwais petrochemicals expansion project. Linde is a global leader in hydrogen solutions and the operation of industrial gases and technology-EPC projects, with a track record of successful investments and projects in hydrogen, olefins, air gases, etc.
What have been your most significant developments over the past two years?
The big event for us was in 2019, when Linde officially merged with US-based Praxair. Since then, Linde has gained significant market share and leadership on a global scale. The combination meant we had to divest some activities and assets because of antitrust regulations from Washington and Brussels. Still, we ended up being the global leader for supplying industrial gases and associated technologies.
With the merger, our position in the Middle East, including the UAE, grew stronger with a broader footprint in the GCC including in Saudi Arabia, Bahrain and the United Arab Emirates. In Kuwait and Oman, we are working in a joint venture with Airtec on the production and supply of bulk, package, medical gases and associated services. We also very recently established a new company in Sohar, Oman.
Given these new capabilities and your market position after the merger, what is Linde’s approach to expanding in the renewable energy sector?
Linde started early to shape its portfolio of technologies and applications for clean energies and is nowadays able to offer various solutions for blue and green hydrogen along the full value chain from generation over transportation to storage, transformation and distribution. For example, Linde is one of the two major players in hydrogen fuelling stations for the mobility market and already operates a grid of such stations in Asia.
Linde invested in one of the major technology providers for large-scale electrolysers with ITM Power, and both companies established a new company for the design and commercialisation of the units of the future. Among the applications recently announced are Linde’s award to build a world-scale electrolysis plant in the Rhineland refinery and Linde’s investment in a new 24-MW electrolyser plant at the Leuna Chemical Complex in Germany.
Hydrogen of all colours – from grey to blue to green, etc. – is at the very core of Linde’s know-how, businesses and strategy.
What is the significance of these electrolysis mega-projects?
The Rhineland plant will have a design capacity of 10 MW and will produce 1,300 tonnes per year of hydrogen. The product will be used for the processing and upgrading of products at the Rhineland refinery and will replace hydrogen from conventional sources. This project will leverage large-scale electrolysis as an integral part of a decarbonised industry.
The new 24-MW electrolyser built, owned and operated by Linde in Leuna will provide green hydrogen to supply our regional customers through the company’s existing pipeline network. In addition, Linde will distribute liquid green hydrogen to refuelling stations and other industrial customers in the region. To give you an idea of the significance, the green hydrogen produced in this large-scale project can fuel as many as 600 fuel cell buses driving 40 million kilometres and will eventually credit Linde with helping to save up to 40,000 tonnes of carbon dioxide emissions per year.
What needs to be done to unlock hydrogen’s potential?
If you want hydrogen mobility, you need to start with projects that are driven and funded by the government. We can’t yet reach a level where those projects can be profitable by themselves. You need to drive it top-down with decisions, to pilot and start commercial implementation. There must be the political will to make it happen in, say, the next decade.
Beyond this, there must be a phased and realistic approach. You cannot decide that tomorrow all cars will run on hydrogen. You need to be very specific in what you want to demonstrate. From there, you need to grow following a clear roadmap. You need to find the right partners in technology, investment and marketing and this is where Linde can be the ideal partner with its strong and technology-driven engineering segment as well as its experienced and world-leading investment arm (the gases division) working together under one roof.
Talking about the region, I see the UAE as being very much in line with this approach. I believe the government and some of the state-owned companies are already playing a role in orchestrating this process. The UAE has its own captive market for mobility with a significant number of cars and buses on the road and mass transportation systems like trains and trams on the rail. The UAE has the basic infrastructure readily available to showcase and to promote this new technology to the world.
What do you see as feasible measures to reduce clean hydrogen production costs?
Besides the availability of affordable renewable energy, the economy of scale will be an important element for developing a sustainable market for blue and green hydrogen. Larger production capacity per plant will reduce the cost per produced unit and will eventually stimulate the global demand. Further target-oriented modifications and improvements of the available technology together with larger production volumes will allow it to reach a competitive level.
As one of ADNOC’s strategic partners in its downstream activities, tell us about the renewal of your partnership and the latest developments.
Together with ADNOC we are discussing several projects. For instance, we are exploring the possibility of supporting with our technology and investments ADNOC’s expansion projects at the Ruwais petrochemical complex. We are open to new projects in the context of the energy transition in the Emirates.
What impact did the pandemic have on your company?
So far, we’ve succeeded in managing and mitigating to a great extent the impact of the pandemic on our people and business in the region. Fortunately, in 2019 we already started to streamline our processes and improve efficiency, so we could better face the drop in projects and sales in 2020 with a minimal impact on our people and their families.
We were also able to focus on, win and execute a good number of small-scale projects for the refitting and modernisation of existing assets and operations of our key customers, which has helped a lot in maintaining some activity and was well pursued by our customers at a time when asset optimisation is becoming a priority. That said, we, like others, suffered from delays in the construction phases of our projects, essentially due to restrictions in site access and demobilisation of some contractors.
The crisis forced us to engage deeper in digitalisation, virtual meetings and web-based conferences and we learnt that we can successfully engage and work with our business partners without physical engagements. This experience will surely change the way we handle business in the future, looking at a more balanced mix of virtual and physical engagements. And frankly I cannot wait to visit our key partners in the region in person, as soon as the conditions are sufficiently safe for all.
Do you have any closing thoughts?
Reflecting on renewables, and more specifically clean hydrogen, we have seen significant changes in the market during the crises. Some major oil and gas players lost market capitalisation during the Covid and oil price crises and have to date not been able to fully recover. We at Linde have always been developing and maintaining a diverse technology and product portfolio and we are actively supporting the transformation towards a greener and more sustainable industry.
Linde has certainly been impacted as well, but we were able to recover. We see this as proof that our vision of an industry based on clean fuels is not only honoured by investors but is also the right way to shape the future of our cities and industries.
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