Woodside, Fortescue in race to pick up NZ green hydrogen project

Woodside and Fortescue are both throwing their hats in the ring to develop a green hydrogen plant in New Zealand that will use renewable energy freed up by the possible closure of a Rio Tinto aluminium smelter.

Southern Green Hydrogen, a joint venture of two NZ power providers, has announced that WA’s two largest companies would enter final negotiations to develop what could be the world’s largest green hydrogen plant with a reported cost of about $4.5 billion.

Both Woodside and Fortescue are keen to diversify into hydrogen as a clean fuel to decarbonise industries that are difficult to electrify, including shipping and steel-making, but have clashed over the best approach.

Fortescue chair Andrew Forrest wants the miner to make 15 million tonnes of green hydrogen a year by 2030 by separating it from water using renewal power.

Meanwhile, Woodside is pursuing green hydrogen as well as blue hydrogen, made by extracting it from gas and either burying or offsetting some or all of the substantial greenhouse gas emissions.

Forrest has labelled the process a fake clean fuel used to greenwash by fossil fuel companies.

Meridian Energy and Contact Energy launched a search for a partner in June 2021, a year after Rio Tinto announced it would close its Tiwai Point aluminium smelter mainly powered by a Meridian hydroelectric plant.

The promise of a large source of ready clean power attracted more than 80 businesses that were narrowed to four in February: the two Australian companies, the Japanese trading house Mitsui and a subsidiary of German specialty gas company Linde.

Woodside and Fortescue’s plans have been complicated by Rio Tinto reversing its exit decision meaning there could be a three-way bidding war for the hydropower.