Key progress at new Kwinana hydrogen hub, as nearby bp project remains on pause

The Western Australia industrial hub at Kwinana, south of Perth, is back in the hydrogen game, with equipment secured and studies underway for the next stage of a government- and industry-backed production and testing facility.

The Future Energy Exports Cooperative Research Centre (Fenex CRC) said on Tuesday it has contracted Pacific Energy to supply two electrolysers and to start a Front End Engineering Design (FEED) for Stage 2 of its Kwinana Energy Transformation Hub (KETH).

The Stage 2 Hydrogen Process Plant will produce both gaseous and liquid hydrogen on site and provide a practical industrial setting for technologies to be tested safely before large-scale deployment technology trials.

Fenex CRC is a $A163 million collaborative research organisation with 49 partners from industry, government and the university sector, tasked with leading research, education and training and building the capacity for Australia to produce, store and transport clean hydrogen.

KETH, the outfit’s flagship project, is being built on a three hectare site in the Kwinana Strategic Industrial Area, supported by a federal government grant and a $15 million grant from the WA government’s Investment Attraction Fund.

The Hub is billed as an “open-access facility” where businesses, researchers, and innovators can test and demonstrate clean energy technologies in real-world conditions, and speed up their path to market.

“This is about creating a real industrial environment where hydrogen technologies can be safely tested and proven before commercial deployment, reducing risk for industry, accelerating development and strengthening Australia’s clean energy capability,” FenexCRC CEO Eric May said on Tuesday.

“With construction of the Stage 1 R&D building well underway, securing the electrolysers and starting FEED work for Stage 2 keeps us on track to deliver a complete hydrogen production, testing and validation platform,” May said.

Fenex CRC and Pacific Energy say construction of the hydrogen process plant is expected to start in late 2026, following completion of FEED and relevant approvals.

Once operational, the facility will produce 130 kg of gaseous hydrogen a day, for research, testing and potential offtake, and 100 kg of liquid hydrogen a day, for pilot-scale testing and demonstration.

It is unlikely to produce anything near 100 per cent green hydrogen, however, with a statement on the project last month noting only that the project site has access to “natural gas, and other key inputs.”

The progress at KETH comes as other major hydrogen projects proposed for Kwinana have stalled or been “paused,” including bp Australia’s H2Kwinana Hydrogen Hub, which plans to start with a 100MW electrolyser and expand to potential 1.5GW production.

H2Kwinana – which was to be built at the site of the oil major’s former Kwinana oil refinery – had looked to be making good progress back in 2023, when work started on a front-end engineering design, backed by $70 million from the federal Albanese government.

But in February 2025, bp confirmed it had decided to “rephase the Kwinana Renewable Fuels project (KRF) … adjusting the pace of delivery of KRF with a focus on improving capital efficiency and better alignment with government policies.”

The decision followed a change in leadership and direction at bp that slashed its spend on “low carbon energy” from a planned $US30 billion out to 2030, to around $4 billion, and redirected investment to its “highest return opportunities,” – namely fossil fuels.

The major scale-back included no new investments in “transition” projects over the following three years, an exit from onshore wind, and a major hydrogen and carbon capture and storage (CCS) cull from around 30 projects to between five and seven “prioritised projects.”

Speaking at the CEDA Climate and Energy Summit in Melbourne last May, bp Australia country president and vice president of hydrogen, Australia and Asia Pacifc, Lucy Nation, said the oil giant had moved “too far, too fast” into nascent sectors like renewable hydrogen.

Nation said that while there was a lot of capital flowing to renewable hydrogen projects in 2021 and 2022, including in Australia, the projects could not “compete on their own.

“They will eventually, but they don’t today, and so therefore … [we need] innovative, stable policy that really de-risks the investment.

“Without customers, suppliers and governments working together to a common time-frame, these projects aren’t going to get built, and that’s why we’ve seen so many announcements in the press of companies going bankrupt because they can’t do the capital raising anymore, or projects being slowed right down,” Nation said.

“I’m particularly worried about it for Australia, with with some of what’s happening in terms of the tertiary industries, deal investment, reprocessing of critical minerals, etcetera.

“[bp was] assuming customers and governments would want [these projects] to go ahead, and we’ve had to slow down.

“It’s that pace, and it’s that collaboration, and it’s also understanding that capital is going to go to the countries that do the best job of de-risking these projects in a meaningful way. And those capital flows are really important.”

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