Norwegian shipping firm Hoegh Evi expects to take a final investment decision (FID) this year on an ammonia-derived hydrogen project to deliver clean fuel into dedicated German grids, chief executive Erik Nyheim said.
The company operates three of its nine floating storage and regasification units (FSRU) for LNG along the German coast, diversifying the country's supply origins since the 2022 energy crisis.
With an eye on Germany's long-term decarbonization goals, Hoegh and private firm Deutsche ReGas are jointly developing a floating hydrogen import terminal at Lubmin on the Baltic Sea with an ammonia cracker that will produce hydrogen ready to be shipped inland.
Would-be investors lack visibility over the value chain for green low- or zero-carbon hydrogen, especially as high electricity prices discourage the use of local wind and solar power in electrolysis plants.
Hoegh pledges an inexpensive import option, delivering ammonia from overseas and converting it to hydrogen, while holding on to its established LNG business for as long as needed.
Ammonia has an established transport chain and is an ideal carrier for hydrogen, the low density of which otherwise makes it difficult to transport over long distances.
"Our aim is to reach a final investment decision (FID) for our Lubmin H2 Terminal project with Deutsche ReGas by the end of this year," Nyheim said in an interview.
"Developing the terminal in Lubmin is the first step to deploying the floating cracker technology by late 2027."
Germany is backing a core hydrogen grid, into which Hoegh would deliver, via a 24 billion euro ($25.01 billion) loan from state lender KfW.
Nyheim said Hoegh, which has signed a deal to cooperate with state-owned energy firm SEFE, might be able to offer green hydrogen at $3-$3.5/kg by 2027, based on current knowledge regarding ammonia pricing.
Costs in Europe currently run at $8-10/kg.
(Reuters - Reporting by Vera Eckert, editing by Kirsten Donovan)
