MoU for CO2-free hydrogen production in Malaysia

ENEOS has signed a memorandum of understanding (MoU) with Sarawak Economic Development Company (SEDC) Energy and Sumitomo to consider collaborating on establishing a CO₂-free hydrogen supply chain using renewable energy.

The use of hydrogen as an energy carrier for powering fuel cells in vehicles, buildings, and other infrastructure is receiving widescale attention. However, the main processes for its production use fossil fuels and produce carbon dioxide. More sustainable methods of production would benefit society as it moves toward net-zero.

The CO₂-free supply chain under consideration involves production of several tens of thousands of tons of CO₂-free hydrogen generated at hydroelectric power stations in Sarawak, Malaysia. Hydroelectric power is relatively stable and surplus power can be used for water electrolysis, enabling stable, low-cost production of CO₂-free hydrogen, says ENEOS. According to the company, Sarawak has abundant hydropower resources. Total capacity of power stations in the state is currently 3.5 GW and an additional 1.3 GW is planned by 2025.

The supply chain will also involve converting hydrogen into methylcyclohexane (MCH) to enable efficient hydrogen transport. ENEOS, a fully-integrated Japanese oil company, says that MCH is a liquid under normal temperature and pressure with a volume 1/500th of hydrogen gas. The supply chain would also see chemical tankers used to enable marine transport of hydrogen to markets outside of Malaysia. 

In this collaboration, ENEOS will be in charge of the process from MCH production to marine transport and will carry out engineering studies for equipment specifications relative to the size of the Japanese market.

Sumitomo will be responsible for a feasibility assessment of the process, from hydroelectric power generation to hydrogen production. Sumitomo, headquartered in Japan, conducts business activities across a wide range of industries, including energy.

SEDC Energy will provide the partnership with overall support, including location selection and site surveys. SEDC Energy is a wholly-owned subsidiary which manages the energy businesses of SEDC, a state development and investment agency.

The companies intend to site the project in Bintulu, Sarawak, Malaysia. The town has a large petrochemical industry and its existing facilities and infrastructure – including tanks, loading equipment, and ports and berths – can be used for MCH export.

The MoU collaborators intend to conduct a feasibility study with scope encompassing hydrogen production and shipping in Malaysia, and transport. The study will commence in 2021.

Based on the outcomes of this collaboration, ENEOS will consider creating other projects directly linked to social implementation of hydrogen. Specifically, the company will assess the feasibility of using dehydrogenated, CO₂-free hydrogen in its Japanese refineries and nearby thermal power plants, as well as to supply hydrogen to other Asian nations such as Malaysia and Singapore.