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Norway's Hoegh plans hydrogen deliveries to Germany

Erik Nyheim, CEO of Norwegian shipping company Hoegh Evi, said that the firm expects to make a final decision on investment (FID) in this year for a project to produce ammonia-derived hydrogen to be delivered to German grids.

Three of the nine floating storage units and regasification (FSRU) are located along the German coastline, diversifying Germany's energy supply sources since the energy crisis in 2022.

In order to meet Germany's long term decarbonisation targets, Hoegh is working with private company Deutsche ReGas on a floating import terminal for hydrogen at Lubmin in the Baltic Sea. The ammonia cracker will produce hydrogen that can be transported inland.

Why does it matter?

Investors lack visibility of the value chain in green hydrogen that is zero-carbon or low-carbon, particularly as electricity prices are high and discourage the use local wind and solar energy for electrolysis plants.

Hoegh promises a low-cost import option by delivering ammonia and converting it into hydrogen from overseas, while maintaining its LNG business as long as necessary.

Ammonia is a good carrier of hydrogen due to its low density.

KEY QUOTES

Nyheim stated in an interview that "our goal is to achieve a final investment decisions (FIDs) for our Lubmin H2 Terminal Project with Deutsche ReGas before the end of this calendar year."

The terminal at Lubmin will be the first step in deploying floating cracker technology before the end of 2027.

By the Numbers

Germany has backed a core grid of hydrogen, which Hoegh will deliver, with a loan of 24 billion euros ($25.01billion) from the state lender KfW.

Nyheim stated that Hoegh could be able, based upon current information regarding ammonia prices, to offer green hydrogen for $3-$3.5/kg in 2027.

In Europe, the cost of a kilogram is currently between $8 and $10.

(source: Reuters)