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BP and Rio Tinto Launch New Company 'Hydrogen Energy'

Sunday, May 18, 2007
Article Type: Cited 

BP and Rio Tinto have announed the formation of a jointly owned company called Hydrogen Energy, which will focus on hydrogen-fuelled power generation internationally, using fossil fuels and carbon capture technology.

The initiative will combine Rio Tinto's expertise in coal mining and BP's expertise in chemical processing, low carbon power generation and carbon capture and storage.

It will identify and secure opportunities for low carbon emission energy projects, help governments develop appropriate regulatory regimes, then develop / operate the assets.

BP's previously announced hydrogen fuelled power projects in Peterhead (Scotland) and Carson (California) will become part of the new company. Rio Tinto will make a cash payment of $32m to BP for its half share in these two projects.

The chief executive of Hydrogen Energy is Lewis Gillies, formerly head of BP's hydrogen power business, and its chief financial officer is Peter Cunningham, formerly head of business evaluation for Rio Tinto. The company will be headquartered in Weybridge, UK.

BP's Peterhead (Scotland) project is a joint venture with Scottish and Southern Energy, and was announced in June 2005. It does not yet have a formal go-ahead, but BP says if the go-ahead decision is taken in early 2008 it will be in commercial operation in 2011.

The project will burn natural gas, and generate 475 MW of electricity, and capture 1.8m tonnes CO2 per year, which will be buried in the North Sea Miller Oilfield. This CO2 will be used to help drive more oil out of the ground. Engineering design of the project is complete.

The Carson (California) project will burn petroleum coke. Plans were announced for the plant in January 2006 by BP in partnership with Edison Mission Group. It is adjacent to BP's Carson refinery; the petroleum coke is a by product of the refinery. It would capture 4m tonnes CO2 per year and reinject it into geological formations in Southern California. BP anticipates the plant should be operational by the end of 2012 subject to "successful outcome of engineering studies and appropriate policy being in place."

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