Frontier and AGIG deal could give WA’s gas network a shot of green hydrogen

Frontier’s goal of becoming a significant green hydrogen player has received a big leg up after signing a collaboration with AGIG to inject hydrogen into the Dampier to Bunbury Natural Gas Pipeline (DBNGP).

Under the agreement, the two companies enter discussions to determine the type of agreements that will allow for the injection of an agreed percentage of hydrogen into the Mainline South section of the DBNGP – Western Australia’s biggest gas transmission asset with a connection point just 300m from the proposed hydrogen plant location.

Both parties will work together to undertake a Front End Engineering and Design (FEED) Study for the injection facility and hydrogen blending station.

Frontier Energy (ASX:FHE) notes that Stage One of the project will account for the injection of hydrogen equivalent to less than 1% of the average minimum flow of gas through the Mainline South pipeline, which AGIG had already determined is capable of injecting up to 9% hydrogen without any major modifications in a positive Feasibility Study in 2022.

This is also in line with the Western Australian State Government’s goal of having up to 10% hydrogen blended with natural gas across its gas network by 2030.

Additionally, both the State and Federal governments have begun the process of amending national gas laws and regulations to bring hydrogen blends, biomethane and other renewable gases under the national gas regulatory framework with completion expected in early 2024.

Working with AGIG

“We have been working with AGIG in relation to the injection of hydrogen from our Bristol Springs Project into the DBNGP,” managing director Sam Lee Mohan said.

“Formalising our relationship is an important step in the process of developing the hydrogen economy in WA.

“Given our proximity to DBNGP, it is a win-win for all stakeholders and ensures we are a step closer to contributing to the State’s goal of delivering up to 10% hydrogen in the gas networks by 2030.”

He added that while the State Government had been supportive of the green hydrogen industry, the current state of legislative frameworks and intended amendments required “acceleration”.

“To have a tangible project located on a section of the DBNGP that is immediately available for hydrogen injection and working with Government on legislative amendments will streamline and deliver the necessary change required to stimulate the green hydrogen industry,” he concluded.

Not AGIG’s first rodeo

AGIG is no stranger to producing hydrogen and blending hydrogen with natural gas.

The gas infrastructure group has produced renewable hydrogen at its Tonsley Innovation District in Mitchell Park, Hydrogen Park South Australia, since May 2021.

This allowed AGIG to deliver a 5% renewable gas blend to more than 700 gas customers in Mitchell Park.

In March, it extended the project area to include a further 3,000 gas connections including households, businesses, and schools.

Bristol Springs Green Hydrogen Project

Frontier is pushing hard to deliver its Bristol Springs Green Hydrogen Project, which promises to be one of Australia’s lowest cost green hydrogen producers.

According to the Definitive Feasibility Study for the first phase, the project is expected to produce 4.9Mkg of green hydrogen per annum at a price of $2.77/kg – well within shouting distance of $2/kg that is widely considered to be competitive with fossil fuels.

Initial capital cost, which is inclusive of the 114-megawatt solar farm and a 36MW electrolyser, is estimated at $242.5m with first production expected in 2025/early 2026.

Successful development of the first stage will pave the way for Frontier’s long-term plan of producing at least 1GW of renewable energy in the Waroona region – which would be sufficient to produce approximately 80 Mkg pa of green hydrogen.

This article was developed in collaboration with Frontier Energy, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.