Oil and Gas Sector Strategies in Blue Hydrogen

Oil and gas companies have been exploring blue hydrogen as it enables them to capitalize on existing skills and processes, reduce overall emissions, and future-proof their operations through product diversification. However, shifting corporate strategies has resulted in a downturn of activity for oil and gas players within the blue hydrogen market over the past year.

Currently, blue hydrogen accounts for the lion's share of active low-carbon hydrogen capacity, at 84%. This has been facilitated by the relative ease of retrofitting existing grey hydrogen production compared to building out new capacity. Despite blue hydrogen being expected to see a strong growth in capacity until the end of the decade, its growth is forecasted to be outpaced by green hydrogen.

The promise of lower levelized production costs, helped by falling renewable energy prices, has historically spurred interest in green hydrogen. However, green projects continue to face a number of barriers to reaching completion. As a result, oil and gas companies have been exploring blue hydrogen for a number of reasons.

Oil and gas companies have broadly maintained their competitive positioning within the blue hydrogen market. However, there are also examples where there has been a downturn in activity over the past year as corporate strategies shift. Companies such as BP and Shell, have announced the halting or complete cancellation of some blue hydrogen projects as part of a scale back of investments in low-carbon solutions, instead focusing on high-margin projects.

Key Highlights

• Currently, ExxonMobil and Shell are the largest oil and gas participants investing in blue hydrogen projects, with cumulative capacities totaling 952ktpa and 797ktpa, respectively. However, the two companies' strategies differ with ExxonMobil being involved in a lower volume of projects, with the bulk of its capacity driven by its highly-anticipated Baytown Hydrogen Facility in the US.

Scope

• Global blue hydrogen market outlook
• Largest upcoming blue hydrogen projects involving oil and gas companies
• Key oil and gas players in blue hydrogen
• Key deals in the blue hydrogen market involving oil and gas companies
• Oil and gas companies' blue hydrogen strategies

Reasons to Buy

• Identify decarbonizing market trends within the oil and gas sector, including the analysis of the strategies that the biggest industry players are implementing.
• Develop market insight of the major technologies and pathways used to decarbonize the industry, including retrofitting existing grey hydrogen facilities with carbon capture, storage, and utilization (CCUS) technologies to produce blue hydrogen.
• Facilitate the understanding of what is predicted to happen in the blue hydrogen market within the next decade and the impact oil and gas players will have on the outcome.