Global oil giant bp is now aiming for 2029 as the potential start date for electricity generation from its $55 billion Australian Renewable Energy Hub (AREH) near the Pilbara.
The giant 26 gigawatt (GW) project, bigger than Sun Cable in the Northern Territory and likely to be the biggest in the country, has had a series of suggested deadlines since it was first mooted in 2017 by international energy project developers InterContinental Energy and CWP Global.
When bp bought into the then-Asian Renewable Energy Hub in 2022, the timeline was for financial close to be achieved in 2024 and the first power in 2026. Later that shifted to 2028 for either first power, or green hydrogen exports.
The current deadlines flag green hydrogen production for local green steel by the early 2030s, according to the project’s new website, and ammonia exports by the mid-2030s.
A spokesperson for bp declined to comment on when financial close will be reached, when construction will begin, or even to clarify if the project’s start date had been delayed, as reported in Western Australia media.
In July this year, GHD was named to build the Pilbara Green Link, the critical transmission line to connect local utility Horizon Power’s infrastructure with AREH. GHD said preliminary engineering will only be finished by March 2025.
While bp beds down the details for AREH, it has also back-tracked on a goal to cut oil production by 40 per cent from 2019 levels come 2030. That target had already been reduced to 25 per cent, and will now be dropped altogether.
Instead, the company is green lighting a series of new oil fields for development, including the massive Gulf of Mexico Kaskida deepwater oil field, and the Carbon Tracker Initiative expects it to do the same for the deep water Tiber field in 2025 as well as expand production in Kuwait and bring on new fields in Iraq.
Big Oil’s attempt to become ‘Big Energy’ has come unmoored in the last two years. Shell began divesting its clean energy holdings in 2023, and in the same year large oil companies reduced their fossil fuel divestments and allocated more money to upstream assets, according to Bloomberg NEF.
Oil companies have not proved to be very good at investing in green energy, as the new technologies cannot yet match the historically windfall returns of oil while at the same time being more complicated to fund.
Green hydrogen dreams
The AREH project is one of bp’s attempts to use clean energy to make something it knows how to deal with: gas.
At full scale, the giant project could cover 6,500 square kms of land of the Nyangumarta people, and with up to 26 gigawatts of capacity from 1700 wind turbines and vast fields of solar panels.
BP wants to eventually use some of that electricity to make green hydrogen, and at that scale it could produce 1.6 million tonnes of green hydrogen or 9 million tonnes of green ammonia per annum.
In September, the oil giant’s vice-president, hydrogen, Australia and Asia-Pacific Lucy Nation told a hydrogen conference in Brisbane that BP is still aiming to get 1 GW of unfirmed wind or solar into the local grid as part of the first phase of construction as the first and second phases of the project.
Further ahead is one of bp’s other green hydrogen projects, the H2Kwinana hub for which engineering started last year.
While AREH has major project status from the federal government, meaning it goes through streamlined planning processes, H2Kwinana has $70 million in federal funding and is ont he shortlist for the federal Hydrogen Headstate $2/kg subsidy and tax credits.
The AREH concept was first launched in 2017 by CWP and InterContinental Energy, during a flurry of excitement around the potential for green hydrogen.
The then-Asian Renewable Energy Hub initially planned to export 6GW of green power to Indonesia via a sub-sea cable. Macquarie came on board in 2019 and the project expanded to also sell power to companies operating in the Pilbara.
The current and final concept was reached before BP bought in – but was rejected by Liberal environment minister Sussan Ley on the grounds the energy generation and ammonia plant would harm internationally significant wetlands that are an important stopover for migratory birds.
Macquarie sold its 15 per cent stake to bp in February this year, leaving the oil company with a 64 per cent majority stake.
