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TC Energy Eyes Alberta Site for Hydrogen Production Hub

4/26/2022

(P&GJ) — Canadian pipeline operator TC Energy Corp. has begun evaluating plans for a hydrogen production hub on 140 acres in Crossfield, Alberta. The proposed site would accompany its existing natural gas storage facility in Crossfield that holds 68 billion cubic feet of natural gas.

The pipeline company will work with U.S. electric vehicle startup Nikola Corp. on feasibility for the project which could eventually see the construction and operation of a large-scale hydrogen production facility to distribute fuel for long-haul electric trucks, as well as energy for residential and commercial heating and power generation.

“With our focus on creating low-carbon solutions for businesses, we’ve identified our Crossfield site as a hub to produce and distribute hydrogen to serve long-haul transportation, power generation, large industrials and heating customers across the United States and Canada,” Corey Hessen, executive vice president, and president, power, storage and origination at TC Energy, said.

The proposed hub, located 31 miles (50 km) north of Calgary, would produce an estimated 60 tonnes of hydrogen per day, with the capacity to increase to 150 tonnes per day. The CO2 generated during production would be captured and stored underground in order to help lower emissions, resulting in the product known as “blue” hydrogen.

Hessen estimated the project would cost between $400 million and $800 million, based on an estimated capex of $10 million per tonne.

“It’s early days, so we don’t know exactly what that demand will be. Sizing will be a function of the demand that we can create with our customers,” Hessen told Financial Post.

Last October, TC Energy first announced the partnership with Arizona-based Nikola to develop large-scale hydrogen hubs across the U.S. and Canada. The companies agreed to use the fuel produced from the hubs to power Nikola’s Class 8 fuel cell electric vehicles (FCEVs) within the next five years.

In the announcement, the operator said it intends to use its existing pipeline and storage assets to distribute hydrogen and ship carbon emissions from the hydrogen production process to permanent storage sites. It has been looking to use its existing infrastructure to pursue energy transition opportunities, at a time when new fossil fuel pipelines are facing increasing environmental opposition.

"We believe this announcement reinforces the long-term value of TRP's pipeline infrastructure and steel in the ground with its ability to repurpose and support the energy transition, especially in the current difficult regulatory environment of building new pipelines," BMO Capital Markets analyst Ben Pham said in the statement released last year.

The plan for the proposed Crossfield hub will be highlighted during the first-ever Canadian Hydrogen Convention in Edmonton, Alberta. TC Energy expects a final investment decision by the end of 2023; the project will be subject to regulatory approvals.