Woodside selected to deliver NZ green hydrogen megaproject

Woodside has won out over Fortescue Future Industries to deliver the proposed Southern Green Hydrogen megaproject in New Zealand’s Southland. The 600 MW project intends to produce green hydrogen for export using power from partner Meridian Energy’s hydroelectric plant.

November 30, 2022 Bella Peacock

Meridian's Manapōuri Power Station in Southland, on the southern tip of New Zealand's south island, would power the green hydrogen facility.

Image: Southern Green Hydrogen

After a list of 80 interested companies was whittled down to two, Australia’s Woodside has ultimately come out on top, selected by Meridian Energy as its preferred partner to deliver the $4.5 billion (USD 3 billion) Southern Green Hydrogen project on New Zealand’s southernmost tip.

The announcement also included the news that Meridian’s joint venture partner for the project, Contact Energy, has pulled out. The reason for the withdrawal was not given, with Meridian simply saying Contact Energy had decided not to continue into the next phase of the project as a development partner, though it will remain a potential electricity supplier.

Amid the comings and goings is Japan’s Mitsui & Co. Meridian says Mitsui – which boasts the largest share of ammonia imports into Japan – is also now in discussions to join the project.

The proposal will now move into the final investment decision stage. Then, subject to finalising commercial arrangements, Meridian, Woodside, and Mitsui will work towards commencing front-end engineering design for the project.

Southern Green Hydrogen megaproject

The Southern Green Hydrogen project was proposed in June 2021 to explore the opportunity of producing green hydrogen in Southland following the announcement Rio Tinto would close its Tiwai Point aluminium smelter, primarily powered by a Meridian hydroelectric plant.

The vision is to build a 600 MW facility which would use the power from Meridian’s Manapouri hydro scheme to energise hydrogen electrolysers, targeting an annual production of 500,000 tonnes of ammonia.

“We expect the facility will have the added benefit of being able to provide up to 40% of New Zealand’s dry year flexibility needs to the electricity sector,” Meridian Energy CEO Neal Barclay said.

Nonetheless, there are doubts about the potential demand for Asia-Pacific ammonia megaprojects as Europe and the US usher in superior policy environments.

Nonetheless, winning the project is undoubtedly important for Woodside, which is facing sharp and renewed criticism over its Scarborough gas project, a sustained focus of environmental group Greenpeace. Woodside is looking to stay relevant through its move into hydrogen, but is notably pursuing both blue (hydrogen made from fossil gas) as well as some green, renewable projects.

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